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VISTA GROUP INTERNATIONAL LIMITED

ANNUALREPORT

2016

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02 Chairman & CEO’s Letter

04 Vista Group Companies

GROUP TRADING OVERVIEW

10 Group Trading Overview

15 Corporate Responsibility

FINANCIAL STATEMENTS

18 Corporate Information

20 Directors’ Report

21 Independent Auditor’s Report

27 Financial Statements

CORPORATE GOVERNANCE

66 Corporate Governance

This report is dated 24 March 2017 and is signed

on behalf of the Board of Vista Group International

Limited by Kirk Senior, Executive Chairman, and

Murray Holdaway, Chief Executive.

K SeniorEXECUTIVE CHAIRMAN24 March 2017

M HoldawayCHIEF EXECUTIVE24 March 2017

TABLE OF

CONTENTS

01ANNUAL REPORT 2016

Chairman & CEO’s Letter

KIRK SENIOREXECUTIVE CHAIRMAN

MURRAY HOLDAWAYGROUP CEO

CHAIRMAN AND CEO’S LETTER

Dear Shareholder,

Welcome to the Annual Report of Vista Group

International Limited (Vista Group). 2016 was another

very strong year of profi t, growth and investment for

the future.

We have many strengths across all our businesses,

but in particular we’d like to highlight the following:

• Leading global position in an expanding fi lm industry

• Consistent strong revenue growth

• Strong recurring revenue

• Sustained profi tability

• Positive operating cash generation

• Dividend payer

One of the many highlights of 2016 was our major

strategic transaction in China. We had a strong and

growing business in China and now, with a signifi cant

partner in WePiao, we are even more enthusiastic

about the future potential for that business in the China

market. The transaction resulted in a large capital gain

in 2016 ($41m), but the outlook for Vista China going

forward is what we are most excited about.

FINANCIALS

Vista Group delivered strong growth in 2016, exceeding

the revenue and EBITDA(1) of 2015.

Vista Group revenue of $88.6m was $23.2m or 35%

up on 2015. EBITDA(1) of $17.6m was 17% ahead of the

previous year.

We expect to maintain annual revenue growth in the

20-25% range in the coming year.

(1) EBITDA is defi ned as earnings before depreciation and amortisation ($3.3m), net fi nance expense, income tax and the expense accrual related to the VCL deferred consideration.

VISTA CINEMA

Vista Cinema achieved another powerhouse

performance with 20%+ revenue growth and 847 new

cinema sites, now totalling 5,557 sites globally. New

cinema site openings remain strong globally and Vista

Cinema’s position as the leading software supplier

will ensure continued strong growth. The very strong

revenue base underpins the Group’s high level of over

60% recurring revenue to total revenue.

We continue to invest internally in innovation, both

with existing products and new ideas. Opportunities

with cloud technologies, social media and global

ticketing platforms provide exciting opportunities

for 2017 and beyond.

VEEZI

Veezi site numbers grew over 50% with very strong, and

higher than anticipated, recurring revenue. Continued

momentum in the USA, a recent industry wide agreement

in Sweden and market entries in France, China and India

should propel Veezi to exciting growth targets in 2017.

MOVIO

Movio is on track with its mission to revolutionise the

way the fi lm industry connects with and targets movie

goers. Movio Cinema continues to build an impressive

resume of cinema circuits, a key driver of success for

Movio Media. The media business continues to achieve

high engagement with the major fi lm studios, with

several multi-year deals in place. In addition, Movio

Media has attracted signifi cant interest from large third

party digital marketing agencies which should extend

campaign offerings and open up new opportunities.

02VISTA GROUP INTERNATIONAL LIMITED

MACCS

The major focus of 2016 was delivering the development

work for the Warner Bros. USA implementation, which

went live in late February 2017. This is a major milestone,

and creates a platform for MACCS to continue to

grow in the USA. MACCS also performed well in a

number of international territories and continues to

be the pre-eminent supplier of theatrical distribution

software globally.

NUMERO

Numero continues to build its reputation as a cutting

edge technology supplier of fi lm box offi ce tracking.

The early stage commercial deals in place in Australia

and New Zealand have given it a strong platform

to expand in 2017. Numero has started collecting

signifi cant data from China, attracting strong interest

from the major fi lm studios, and is executing plans for

other market expansions.

POWSTER

We invested in this successful UK based creative

marketing business in April 2016 and are delighted with

the strong revenue and EBITDA contributions, but also

the synergies that this business brings to other aspects

of the Group. The recent relocation of the company’s

Founder and CEO to Los Angeles should see this

business go to another level in 2017.

CINEMA INTELLIGENCE

We made an early stage investment in Cinema

Intelligence, which uses sophisticated algorithms

to provide business intelligence solutions to cinema

exhibitors focused predominantly on optimising the

forecasting, booking and scheduling of movies. We

look forward to exciting results from this business

in the medium term.

FLICKS

Whilst still a relatively small business in terms of

revenue, this business has achieved strong increased

revenue in 2016 and has its own growth plans, as well

as providing the Group with valuable innovation and

insights that can be utilised globally.

DIVIDEND

In line with the dividend policy established by the Board

in 2016, the Directors have resolved to pay our very fi rst

dividend at the top end of the range (50%) of NPAT

attributable to owners of the parent after adjustment

for the capital gain related to the disposal of Vista

China. The dividend will carry full imputation credits.

The dividend of 4.61 cents per share represents a total

payment of $3.8m and is payable on 24 March 2017 for

shareholders of record on 10 March 2017.

PEOPLE

During the year, the Group made a signifi cant

investment in additional talent, increasing the staff

numbers in existing businesses by over 100 people.

When you add in the acquisitions we made, total staff

numbers for the group now exceed 530. Vista Group is

focused on attracting a highly talented and diversifi ed

workforce and acknowledge all those involved in the

recruitment, training and mentoring of all our people –

well done, you are doing a great job!

We are also delighted to welcome the appointment

of an additional Independent Director, Cris Nicolli,

who joined the Board on 17 February 2017. Cris brings

signifi cant experience and skills in the IT sector and

leadership of large scale technology businesses

which have seen signifi cant growth, and strongly

complements the skills of the existing Board.

OUTLOOK

The outlook for all our businesses looks very positive.

We will continue to leverage our global position as the

leading supplier of software to the fi lm industry and

the many exciting and innovative opportunities that

arise from that.

On behalf of the Board, we thank you for your

continued support.

Yours sincerely,

Murray HoldawayCEO AND FOUNDER

Kirk SeniorEXECUTIVE CHAIRMAN


VISTA GROUP COMPANIES

VISTA ENTERTAINMENT SOLUTIONS (VES)

100%

MOVIO

100%

MACCS INTERNATIONALB.V

50.1%

CINEMAINTELLIGENCE

50%

POWSTER

50%

FLICKS

100%

NUMERO

50%


Vista Group is continuing its mission to become the

leading provider of software to the fi lm industry.

Vista Group operates in a vertical market which in many

respects is similar to any other vertical industry. In most

industries the sectors are known as manufacturing,

supply, retail and consumer. In the fi lm industry our

sectors are known as:

• Production – entities that make movies

• Distribution – entities that distribute movies

• Exhibition – the cinemas that show the movies

• Moviegoer – the public that go to see a movie

The graphic below is a view of how Vista Group sees the

vertical market that it operates in and where the products

that it currently offers fi t in to that vertical market.

With the integration of the products that Vista Group

has created/acquired we are building an ability to

follow the business elements of a fi lm from production

through to viewing by a moviegoer. We are then able

to follow the data and fi nancial results created at the

box offi ce back through to the various industry sectors.

The data aggregation and analysis that is required

by the fi lm industry is signifi cant. This provides many

additional opportunities for Vista Group products

(Movio, Numero, Powster) along with the opportunity

to pass data between the vertical sectors (highlighted

by the grey bands) more effi ciently. These activities

provide signifi cant current and future market

opportunities for Vista Group.

PRODUCTION DISTRIBUTION CINEMA EXHIBITION MOVIEGOER

FILMS

$$$$

YouHoyts / Event

Regal / CineplexVUE Cinemas

Madman E1

Rialto

Legendary Entertainment Amblin Entertainment Scott Free Productions

Wingnut Films

THE BIG STUDIOS: Sony / Disney / Paramount

Warner Bros / Universal / Fox


OVERVIEW OF VISTA GROUP BUSINESSES AND PRODUCTS

Vista Cinema delivered another very strong performance in 2016

with positive revenue growth, and a continuation of excellent EBITDA

results. Growth was achieved while substantially boosting organisational

capability with over 88 people added in key areas of Product

Development and Global Operations.

Vista Cinema was implemented in new countries (including Ukraine,

Denmark, and Paraguay), and for new customers including Jinyi (China),

Ster Kinekor (South Africa), and Nordisk (Denmark). Vista Cinema ended

2016 with 5,557 sites implemented globally – an increase of 847 (18%) from

the previous year. This represented 686 new license sites and 161 from

the CCG relationship in France. In addition, Vista Cinema implemented its

software in 285 non cinema sites for existing customers in related small

retail food and beverage operations.

Exciting new developments in both new and existing product areas were

well advanced in 2016. In particular, the areas of Staff Management, Media

Management, and the management of third party ticket sales channels

present increasing opportunities for growth. Additionally, in 2016, Vista

Cinema ramped up its investment in the software design area, investing

further in a strong design (UI/UX) team, and broadening the technology

base of the products created.

Veezi reached the milestone of 500 contracted sites during 2016, and is

now installed in over 20 countries. Signifi cant work was undertaken on a

country wide agreement in Sweden. This has been completed in 2017 and

with over 120 letters of intent signed, it is expected to provide a signifi cant

boost to site numbers. First sites went live in the important countries of

China and France, while work on the product to make it saleable in India

neared completion. Average revenue per contracted cinema continues to

grow as product additions were made available and customer transaction

volumes exceeded expectations.

Movio Cinema revenue grew 42% in 2016, with notable growth in South

Africa, Norway, Denmark, the UAE and the successful implementation of

Vue in the United Kingdom. Movio Cinema’s Campaign component grew

signifi cantly, with email volume increasing 108% to 1.5 billion and the SMS

business growing from an initial 500,000 messages in 2015 to 10 million

in 2016. Contracted customers increased 47% to 50 from FY2015.

Movio Media continues to evolve the product offering to fi ll new demand,

with a number of product releases attracting new customers, in particular

the addition of ethnicity data for the US market. This capability assisted

in securing long term agreements with Warner Bros. and Sony. New

contracts are expected in early 2017 which will expand the reach of the

Media product. Revenue contribution increased more than 100% from

FY2015 with further growth projected.


MACCS performed slightly below expectation due to the Warner Bros.

implementation being moved from November 2016 to February 2017.

Signifi cant services revenue was earned during 2016 as part of the project,

however the expected go-live in February 2017 will enable further license

revenue to be recognised. MACCS has performed well in international

territories outside of the USA, with a number of new territories being added.

Signifi cant progress was made in bringing its box offi ce collection service

MACCSbox to a number of new markets including Australia and the USA.

NEW ACQUISITIONS

In the fi rst 6 months of 2016 Vista Group completed the strategic

acquisition of three companies: Powster Limited (‘Powster’), Share

Dimension B.V. including its subsidiary S.C. Share Dimension S.R.L.

(collectively ‘Cinema Intelligence’) and Flicks.co.nz Limited (‘Flicks’).

Powster has performed to plan and has added to the Vista Group result

at both revenue and EBITDA lines. Progress has been made towards

establishing a creative studio in Los Angeles which should add

signifi cant business to Powster in 2017.

Cinema Intelligence is still an early stage business and continues to

require investment from Vista Group. A signifi cant new product in Box

Offi ce Forecasting was brought to market and has gained interest from

a number of existing Vista Group customers.

Flicks is still a relatively small business in terms of revenue, but achieved

encouraging revenue growth in New Zealand with all major fi lm distributors

advertising on the platform throughout the year. A new Flicks Android app

was added to the NZ market, as well as an update of the existing Apple

iOS app. The visitation rate to Flicks’ websites and mobile apps in Australia

continues to grow and 2017 should see further monetisation of this growth.


VISTA CHINA

Vista Group completed one of the largest tech industry

transactions in China by a New Zealand company during

2016. This involved a transaction with Bejing Weying

Technology Co. Ltd (WePiao) – a Tencent affi liate.

In what is the fastest growing fi lm and cinema market

in the world Vista Group is providing the new venture

with the distribution rights to all existing Vista Group

software including Vista Cinema, Veezi, Movio,

MACCS and Numero. This is expected to facilitate

the acceleration of Vista Group’s growth strategy in

China for its core cinema product Vista Cinema and

its cloud based product, Veezi, which is ideally suited

to the large number of smaller cinemas in China. It will

also provide a launch platform for Movio, MACCS and

Numero software in China.

The basis of the transaction was:

• Vista Group reduced its equity holding in its Chinese

subsidiary from 100% to 39.5%

- Sale of shares in Vista China

- Vista China issuing new shares to WePiao to raise

capital for growth

• Vista Group providing Vista China with a 10 year

exclusive distribution right to its 5 core products –

Vista Cinema, Veezi, Movio, MACCS and Numero

• WePiao to subscribe for 2.0% of new shares to be

issued in Vista Group

Full explanation of the treatment and values associated

with the recognition of the transaction is contained

in our market release of 21 February 2017, with

further detail in sections 4.1 and 4.4 of the Financial

Statements. The key elements of this are:

• One-off capital gain on sale of shares in Vista China

of $41.1m

• Revenue released in 2016 of $3.4m and $11.0m held

as Deferred Revenue in the Statement of Financial

Position

• Ongoing revenue from maintenance fees through

the term of the reseller agreement

Operationally the new venture is making signifi cant

progress in positioning itself for growth within the

China market. The main purpose of the transaction

with WePiao was to create an entity in China that

had the local presence to represent the Vista Group

products across the whole China market and to develop

the scale to be able to achieve this. The new venture

should become profi table and return positive associate

company earnings to Vista Group in future years.

In the four months since the new venture has been

established it has already:

• Opened an offi ce in Beijing

• Recruited new staff and welcomed staff transferring

from WePiao

• Introduced products beyond Vista Cinema and Veezi

– Numero and Movio

• Signed new customers to support the growth

of the business

Vista Group is excited by the opportunity that this new

venture provides us with, in what is the fastest growing

cinema market in the world.


GROUP TRADING

OVERVIEW

GROUP TRADING OVERVIEW

Vista Group produced strong revenue growth (35%),

positive operating cash fl ow ($5.4m) and maintained

a strong balance sheet to provide a platform for the

continued growth of Vista Group. Earnings based on

EBITDA(1) have improved 16.6% to $17.6m, despite the

$3.0m negative foreign exchange movement compared

to 2015. Vista Group continued its strong focus on

software development, the improvement of its existing

products and the creation of new products for the

market. In line with previous market advice, Vista

Group has capitalised $4.1m against key projects

in Vista Cinema and Movio.

When the EBITDA(1) result is adjusted for abnormal

items such as foreign exchange movements and the

impact of new acquisitions, underlying EBITDA(2)

as a percentage of revenue increased to 22%,

up 2 percentage points from 2015.

This result does highlight the key strengths of Vista Group:

• Leading global position in an expanding fi lm industry

• Consistent strong revenue growth

• Strong annuity revenue

• Sustained profi tability

• Positive operating cash generation

• Dividend payer

(1) EBITDA is defi ned as earnings before depreciation and amortisation ($3.3m), net fi nance expense, income tax and the expense accrual related to the VCL deferred consideration.

(2) Underlying EBITDA is defi ned as EBITDA(1) less foreign currency gains and losses and has the impact of the acquisitions in 2016 removed.

REVENUE ANALYSIS

$ M

illio

ns

0

25

50

75

100

OtherMaintenanceLicense Fees

2016201520142013

30%Average revenue growth

per year for the last 3 years

35%Revenue growth over FY2015

*28% excl. acquisitions

32%Increase in value of recurring

revenue to $53.2m


VISTA CINEMA

Largest Group subsidiary outperformed growth forecasts

for third year in a row. Revenue growth 20%+ in FY2016.

847 new cinema sites added (includes 161 from CCG) to bring

global total to 5,557. In addition 285 installations at customer

owned small retail outlets.

Estimate 38% of large circuit market (global). Total Global screen

growth still strong.

New offi ce in South Africa to support market. With Ster Kinekor

we now have 100% of large circuit market. The offi ce will support

opportunities in the growing African market.

Advanced developments on existing products and new initiatives

for future growth.

Investment in staff to support the business.

TOTAL SITE COUNT

0

1000

2000

3000

4000

5000

6000

20162015201420132012201120102009

NEW SITES ADDED

0

200

400

600

800

1000

1200

AcquisitionsNew customersExisting customers

20162015201420132012201120102009

WORLD SHARE

Vista Entertainment Solutions percentage of the world market – for Cinema Exhibition Companies with 20+ screens.

KIMBAL RILEYChief Executive,

Vista Entertainment Solutions

87% CANADA2,052/2,347 screens

42% USA13,413/31,913 screens

97% CENTRAL AMERICA6,543/6,750 screens

22% SOUTH AMERICA1,260/5,812 screens

23% ASIA7,017/30,415 screens

95% AUSTRALASIA1,698/1,788 screens

38% WORLD WIDE38,896/101,108 screens

26% EUROPE4,845/18,953 screens

57% MIDDLE EAST1,307/2,311 screens

93% AFRICA761/819 screens


VEEZI

Site number growth of 52% to 532 at year end across

20 countries.

Addressable market size approximately 25,000 Cinemas.

ARR strong at $5,750 per annum per site ($480 per month).

New agreement with Film Industry Organisation in Sweden

with signifi cant opportunity in 2017.

French certifi cation achieved and fi rst site live. Wider market

entry planned for 2017.

China SARFT approval gained and fi rst site live in late 2016.

MACCS & MACCSBOX

MACCS – Movie ACCounting System

Theatrical distribution software providing a logistics and

fi nancial solution.

MaccsBox – Theatrical Value Chain

Collects audited box offi ce results (eBor) centrally and

provides them to distributors.

2016

Completed the Warner Bros. domestic enhancements and

the release of MACCS 9.0.

Commenced development of cloud based application for

smaller distributors.

Introduced MaccsBox to the USA.

2017

Warner Bros. go live Q1 2017.

Further country rollouts of MaccsBox.

BURT HULSChief Executive

& Founder

TOTAL SITE COUNT

0

100

200

300

400

500

600

2016201520142013

$3.06mAnnualised Recurring Revenue (ARR)

532Global total of contracted sites

MATTHEW PREENGeneral Manager


POWSTER

Provides world-leading fi lm marketing products

including interactive content to promote fi lms.

Marketing platform for movie studios, powering the

world’s biggest fi lms. One destination per fi lm with

all cinemas and show-times listed.

2016

All six major studios using Powster platforms in the US.

Joined Vista Group.

Doubled staff across London and Los Angeles.

2017

Opening of Los Angeles studio.

Launch Trailered, a new web destination that enables

moviegoers to consume trailers in a completely new way.

Launch of VR show times.

Millio

ns

MEMBER DATABASE

0

20

40

60

80

100

120

Non-active membersActive members

2016201520142013

$305 Total revenue per 1,000 active members

Millio

ns

EMAIL GROWTH

0

100

200

300

400

500

Email/SMS Sent

2016201520142013

MOVIO

On track with their mission: To revolutionise the way fi lm

distributors and cinema exhibitors interact with moviegoers.

Movio Cinema

Increased customers from 37 to 50 of the world’s largest cinema

circuits including AMC (USA), Ster Kinekor (SA) and Vue (UK).

Movio Media

New multi-year deals signed with Sony, Warner Bros., Lionsgate.

Signifi cant opportunities opened up in the digital media space.

2017

Increasing the volume of active moviegoers via new data sources

including online transactions.

Extending the campaign offering to incorporate digital media

(web, mobile, social).

WILL PALMERChief Executive

& Co-founder

STE THOMPSONCEO & Founder


CINEMA INTELLIGENCE

2016

Opened LA offi ce.

Global expansion – running implementations on three continents.

Released new forecasting module.

2017

Build more integration to Vista.

Strong focus on North America.

FLICKS

Authoritative Australasian movie and cinema guide

Moviegoer access nationally for every movie playing; cinemas,

session times, booking links, videos and trailers, reviews

(user and critical) plus editorial from Australasia’s best

industry contributors.

2016

Best year for advertising revenues and best year to date

for total website visitors.

2017

Build Australian advertising revenue.

Commence presence in new territories.

Release new SaaS based website product for small cinemas.

CLAUDIU TANASESCU

CEO

PAUL SCANTLEBURY

CEO


CORPORATE RESPONSIBILITY

Vista Group has grown from a small company created

by 5 founders and then a group of very loyal employees

many of whom over time became senior managers and

shareholders in the business. The goal that Vista Group

should not just be a successful company but a great

place to work, a great supplier and a good corporate

citizen in the territories in which it operates remains

at the core of the way the business operates today.

EMPLOYEES & RECRUITMENT

Vista Group’s success has been built on good people

doing good things. Our ability to attract and retain

talent has been at the heart of our success. Our staff

not only deliver great customer outcomes but have fun

together while doing so. Vista Group genuinely care for

our staff and put their wellbeing at the heart of every

decision we make.

We acknowledge our responsibility as a key employer

in the tech industry in New Zealand and are looking to

continue to take a leadership role in developing both

our staff and industry as a whole.

DIVERSITY

Vista Group always looks for great talent in the people

it employs and that diversity of thought leads to

fantastic idea generation. As the tech industry suffers

from a shortage of talent in New Zealand, and in other

territories in which we operate, we have become

approved by immigration authorities to recruit talented

people from overseas to help grow the employee base

of the business. We have customers in 79 countries

around the world and while our staff do not quite

cover all those countries we certainly represent a wide

range of counties with over 20 languages spoken by

staff. This creates an enormous benefi t to an outward

looking, export oriented New Zealand business.

RELATIONSHIP WITH UNIVERSITIES

From its early days Vista Group formed a strong

relationship with Auckland University and a key

project course run through the Information Systems

department (IS340). For 9 years we had project teams

of 3 work in Vista Group to create prototypes of new

modules, many of which have become part of the Vista

product set. We are very proud of the fact that a high

percentage of those staff have become permanent

staff members upon graduating with many moving

on to leadership roles.

Since then we have created strong relationships

with other faculties and Universities to provide our

knowledge to them and to provide project work for

students and specialist post graduate students.

Vista Group has assisted SESA (Software Engineering

Students Association) through organising co-managed

events as a primary sponsor to ensure students can

enjoy some activities outside of study and of course

to learn a little about Vista Group.

INTERNS

Vista Group runs a strong intern program as part of our

dedication to developing the tech talent of tomorrow.

A testament to our strong employment brand is that

we now have over 650 applicants for the program each

year. The program involves us bringing up to 15 interns

into the business over summer. They are paid to work

on projects and spend time in development teams.

Part time work is offered through the year where this

fi ts a student’s schedule with the goal being that they

will move through to be employees once they have

graduated.

ROBOTICS

On a smaller scale Vista Group has for many years been

a supporter of one of the most successful secondary

school VEX robotics teams in New Zealand. The Lynfi eld

College team (a west Auckland school) has won several

world titles (held in the USA) and through sponsorship

by Vista Group and the Vista Group staff it has assisted

in the building of the Robots and travel costs.


TAXES PAID

Vista Group is committed to being a good corporate

citizen and understands the importance of paying tax

and the positive contribution that tax makes to the

jurisdictions in which it operates. Vista Group does not

actively structure its businesses or policies to divert

profi ts to low tax jurisdictions or tax havens. The largest

single cost element within Vista Group is personnel

costs. This means that in addition to income taxes Vista

Group is a signifi cant payer of payroll based taxes in

all the jurisdictions in which it operates. Vista Group

uses payroll practices and systems approved in each

jurisdiction to ensure that it meets all its obligations

with respect to correctly deducting and paying these

taxes to the local tax authorities.

The pie chart shows the signifi cant share that taxes

make up of total revenue (when combined they are

greater than our profi t).

The bar graph shows taxes as a percentage of Trading

Net Profi t.

TAXES AS A PERCENTAGE OFTOTAL REVENUE

Trading Net Profit

Business Expenses

Payroll TaxesIncome Tax

69.5%13.5%

12.9%

4.0%

TAXES AS A PERCENTAGE OF TRADING NET PROFIT

0%

20%

40%

60%

80%

100%

Payroll TaxesIncome Tax

95.4%

29.6%

VISTA FOUNDATION

Vista Group is passionate about the New Zealand fi lm

industry and wants to help the next generation of

feature fi lm-makers launch their careers.

The principal aim of the Foundation is to foster

a viable, successful and inclusive local fi lm industry

in New Zealand. By providing support and education

for necessary skills and expertise, the Foundation will

encourage the production of exceptional works of

New Zealand cinema, and extend the opportunities

available to more groups and individuals.

A well-supported local fi lm industry will enable material

that builds the cultural base of New Zealand fi lm, in turn

creating works of international appeal that showcase

both New Zealand culture and the fi lm-making talent

of New Zealanders.

With establishment funding from the founding

shareholders of Vista Group and the intent of Vista

Group to continue funding support in future years

the Vista Foundation is positioning itself to meet

its principal aims for many years to come.

Roger Donaldson (producer and director of several

New Zealand classics and several Hollywood

blockbusters) is the patron and the independent Board

of the Vista Foundation has several leading industry

representatives alongside two Vista representatives.


FINANCIAL

STATEMENTS

DIRECTORS Kirk Senior

Murray Holdaway

Brian Cadzow

Susan Peterson

James Ogden

Cris Nicolli – appointed 17 February 2017

REGISTERED OFFICE Level 3, Fujitsu House

60 Khyber Pass Road

Newton

Auckland, 1023

New Zealand

Phone +64 9 984 4570

NATURE OF BUSINESS Provision of management solutions for the fi lm industry

COMPANY NUMBER 1353402

ARBN 600 417 203

AUDITOR PricewaterhouseCoopers

188 Quay St,

Auckland, 1142

SOLICITORS New Zealand

DLA Piper New Zealand

50-64 Customhouse Quay

PO Box 2791

Wellington, 6140

Hudson Gavin Martin

Level 8

2 Commerce Street

Auckland 1010

UK

DLA Piper UK LLP

1 St Paul’s Place

Sheffi eld S1 2JX

United Kingdom

USA

DLA Piper LLP (US)

550 South Hope Street, Suite 2300

Los Angeles, CA 90071-2678

USA

Hernandez Shaeldel & Assoc

2 North Lake Ave, Suite 930

Pasadena, CA 91101

USA

Canada

Davies Ward Phillips & Vineberg

1 First Canadian Place, 44th Floor

Toronto, Ontario

Canada, M5X 1B1

China

Herbert Smith Freehills LLP

28th Floor Offi ce Tower Beijing Yintai Centre

2 Jianguomenwai Avenue

Chaoyang District

Beijing 100022

CORPORATE INFORMATION


SHARE REGISTRY New Zealand

Link Market Services Ltd

Level 11, Deloitte Centre

80 Queen Street

Auckland 1010

Australia

Link Market Services Ltd

Level 12, 680 George St

Sydney

NSW 2000

BANKERS New Zealand

ASB Bank Limited

PO Box 35

Shortland St

Auckland, 1140

Bank of New Zealand

Deloitte Centre

80 Queen Street

Auckland, 1142

UK

HSBC Bank PLC

2nd Floor, 62-76 Park St

London, SE1 9DZ

United Kingdom

Barclays Bank PLC

1 Churchill Place

London, E14 5HP

United Kingdom

USA

HSBC Bank USA, NA

660 South Figueroa Street

Los Angeles

California 90017

USA

China

HSBC Bank (China) Coy. Ltd.

Level 30, HSBC Building

Shanghai ifc

8 Century Avenue, Pudong

Shanghai 200120

People’s Republic of China

China Merchant Bank

18F, Bus Plaza

No. 398 Huaihai Zhong Road

Shanghai 200020

People’s Republic of China

Australia

Commonwealth Bank of Australia

Level 10, 101 George St

Parramatta

NSW 2150

Australia


DIRECTORS’ REPORT

The Board of Directors present the fi nancial statements of the Group for the year ended 31 December 2016 and the

independent auditor’s report thereon.

For and on behalf of the Board of Directors who approved these fi nancial statements for issue on 24 February 2017.

Kirk Senior M Holdaway

EXECUTIVE CHAIRMAN CHIEF EXECUTIVE

24 February 2017 24 February 2017


PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New ZealandT: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz

Independent auditor’s reportTo the shareholders of Vista Group International Limited

The consolidated financial statements comprise:

• the statement of financial position as at 31 December 2016;

• the statement of comprehensive income for the year then ended;

• the statement of changes in equity for the year then ended;

• the statement of cash flows for the year then ended; and

• the notes to the financial statements, which include a summary of significant accounting policies.

Our opinionIn our opinion, the consolidated financial statements of Vista Group International Limited (theCompany), including its subsidiaries (the Group), present fairly, in all material respects, the financialposition of the Group as at 31 December 2016, its financial performance and its cash flows for the yearthen ended in accordance with New Zealand Equivalents to International Financial ReportingStandards (NZ IFRS) and International Financial Reporting Standards (IFRS).

Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAsNZ) and International Standards on Auditing (ISAs). Our responsibilities under those standards arefurther described in the Auditor’s responsibilities for the audit of the consolidated financialstatements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.

We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised)Code of Ethics for Assurance Practitioners (PES 1) issued by the New Zealand Auditing and AssuranceStandards Board and the International Ethics Standards Board for Accountants’ Code of Ethics forProfessional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities inaccordance with these requirements.

Our firm carries out other services for the Group in the areas of related assurance services andemployee incentive scheme advice. The provision of these assurance and other services has notimpaired our independence as auditor of the Group.

Independent Auditor’s Report


PwC

Our audit approachOverview

An audit is designed to obtain reasonable assurance whether the financialstatements are free from material misstatement.

Overall group materiality: $880,000, which represents 1% of total revenues.

We chose revenue as the benchmark because, in our view, this is the metricagainst which is most commonly used by management and the users of thefinancial statements to measure the performance of the Group, and is agenerally accepted benchmark.We agreed with the Audit and Risk Committee that we would report to themmisstatements identified during our audit above $40,000 as well asmisstatements below that amount that, in our view, warranted reporting forqualitative reasons.

Our key audit matters are:• Accounting for the Vista China transaction• Impairment testing of goodwill

MaterialityThe scope of our audit was influenced by our application of materiality.

Based on our professional judgement, we determined certain quantitative thresholds for materiality,including the overall Group materiality for the consolidated financial statements as a whole as set outabove. These, together with qualitative considerations, helped us to determine the scope of our audit,the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, bothindividually and in aggregate on the consolidated financial statements as a whole.

Audit scopeWe designed our audit by assessing the risks of material misstatement in the consolidated financialstatements and our application of materiality. As in all of our audits, we also addressed the risk ofmanagement override of internal controls including among other matters, consideration of whetherthere was evidence of bias that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide anopinion on the consolidated financial statements as a whole, taking into account the structure of theGroup, the accounting processes and controls, and the industry in which the Group operates.

We perform audits of the significant subsidiaries of the Group as well as the holding company toappropriately address the risk of misstatement and to obtain sufficient audit coverage and evidence.These audits were undertaken by PwC New Zealand and performed at a materiality level calculatedwith reference to a proportion of the Group materiality appropriate to the relative financial scale of thesubsidiary concerned.

Materiality

Audit scope

Key auditmatters


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Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most significance inour audit of the consolidated financial statements of the current year. These matters were addressed inthe context of our audit of the consolidated financial statements as a whole, and in forming ouropinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter How our audit addressed the key auditmatter

Accounting for the Vista China transactionNote 4.1 provides details of a number oftransactions that collectively have been termedthe Vista China Transaction. Thesetransactions resulted in two significantestimates where judgement needed to beapplied.

1. Valuation of the retained shareholding inVista ChinaFollowing the disposal of Vista China, theretained interest in Vista China of 39.5% wasinitially recorded at fair value. The valuationwas carried out by an independent expert whodetermined that the value of the residualinterest was $28.6m.The valuation involved:• Determining the value of Vista China based

on the price paid by Bejing WeyingTechnology Co. (WePaio) for the 55%controlling shareholding acquired;

• Determining an appropriate discount ratereflecting significant influence but notcontrol;

• Assessing whether the related resellerarrangements were on arms-length terms.

Determining the appropriate discount rate andassessing the terms of the reseller agreementinvolved the applicable of judgement andestimation.2. Revenue recognition from the ResellerAgreementVista Group has a number of performanceobligations under the reseller agreement.These included the granting of exclusivedistribution rights of Vista’s licensed programsin China, localisation of these products, and

We obtained and reviewed the agreementsassociated with the transaction and helddiscussions with management and the Directorsto understand the legal and commercialsubstance of the arrangements entered into.Having identified that there were two key areasof judgement and estimation, we addressed theseas follows.In relation to the valuation of the retainedinterest in Vista China, we engaged our ownexpert experienced in valuing companies toassess the valuation approach undertaken bymanagements’ independent expert. This includedreviewing the valuation methodology andwhether the discount rate used was supportableby reference to the terms of the transaction andcomparison to other similar transactions.We also considered the independence ofmanagements’ expert, their experience in valuingcompanies and the conclusions reached.In relation to the reseller agreement we gainedan understanding of Vista’s performanceobligations under the agreement. Through reviewof the agreement and discussions withmanagement we determined the appropriaterevenue recognition policy for each performanceobligation.We then gained an understanding of howmanagement had negotiated the revenue dueunder the contract and assessed howmanagement had allocated this to eachperformance obligation using standard sellingprices, in particular the revenue associated withthe granting of distribution rights andlocalisation of the licensed programs. Through


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ongoing training, support and maintenanceservices. Management has applied judgementin determining the nature of theseperformance obligations, the time period overwhich these obligations will be satisfied, theassociated revenue for each obligation andfrom this the amount of revenue that should berecognised.This assessment has resulted in $3.4m ofrevenue being recognised for the year ended 31December 2016 and $11.0m of revenue beingdeferred in the Statement of FinancialPosition.

this we also gained comfort that the resellerarrangement was on arm’s length terms.We ensured that:• At balance date the distribution rights had

been granted in accordance with theagreement and accordingly the associatedrevenue recognised;

• Revenue from maintenance and supportservices had been recognised on a straight-line basis over the period the services are tobe provided in accordance with theagreement; and

• Localisation services have yet to becompleted in accordance with the agreementand therefore have been recorded as deferredrevenue.

From the procedures performed we have nomatters to report.

Impairment testing of goodwillNote 4.3 provides details of the composition ofthe goodwill balance of $50.3 million as at 31December 2016.Management is required to perform an annualassessment to determine whether there is anyimpairment of goodwill. This is disclosed inNote 7.4.To do this, management used a discountedcash flow (DCF) model to value each division(cash generating unit) and then comparedthese values to the carrying value of theassociated assets and liabilities of each cashgenerating unit, including goodwill as at 31December 2016.The discounted cash flow models involve theapplication of judgment including determiningcertain key assumptions and estimates,specifically:• The future revenue growth rates for the 5

year period forecast based on historic andexpected future performance;

• Determining the long term growth rates forcash flows beyond the 5 year forecastperiod;

We gained an understanding of the businessprocess applied by management in assessingimpairment of goodwill. We held discussionswith management about the performance of eachcash generating unit and whether there were anyevents or circumstances that would indicate thatgoodwill was impaired.We assessed the reasonableness of the keyestimates and assumptions made bymanagement, by performing the followingprocedures:• Obtaining an understanding of how

management prepared its budgets andforecast and the associated review andapproval processes;

• Assessing the reliability of management’shistorical budgets and forecasts by referenceto actual performance;

• Assessing whether the growth rates used overthe 5 year period forecast were reasonablecompared to historic growth, board approvedbudgets and other strategic and operationalinitiatives being undertaken;


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• Calculating the weighted average cost ofcapital for each cash generating unit usedto discount the forecast cash flows.

The assessments completed by managementconcluded that goodwill was not impaired as at31 December 2016 but the valuation of ShareDimension was sensitive to changes in therevenue growth assumptions, as disclosed inNote 7.4 of the financial statements.

• Comparing the terminal growth rates againstNew Zealand long-term rates and industryspecific rates; and

• Recalculating the discount rates used andcomparing the discount rates against similarmarket participants.

• We also performed a sensitivity analysis byincreasing and decreasing key assumptions toconsider whether any reasonably possiblechanges could result in impairment ofgoodwill.

Based on the procedures performed and evidenceexamined we obtained comfort that the keyassumptions and estimates were appropriate tosupport the impairment tests and that areasonable possible change in key assumptionswould not result in an impairment other than inrespect of the carrying value of ShareDimension’s goodwill of $1.7 million.

Information other than the financial statements and auditor’s reportThe Directors are responsible for the annual report. The annual report is expected to be made availableto us after the date of this auditor’s report.

Our opinion on the consolidated financial statements does not cover the other information included inthe annual report and we do not express any form of assurance conclusion on the other information. Inconnection with our audit of the consolidated financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materially inconsistentwith the consolidated financial statements or our knowledge obtained in the audit, or otherwiseappears to be materially misstated. If, when we read the annual report, we conclude that there is amaterial misstatement of this other information, we are required to report that fact.

Responsibilities of the Directors for the consolidated financial statementsThe Directors are responsible, on behalf of the Company, for the preparation and fair presentation ofthe consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internalcontrol as the Directors determine is necessary to enable the preparation of consolidated financialstatements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Directors are responsible for assessing theGroup’s ability to continue as a going concern, disclosing, as applicable, matters related to goingconcern and using the going concern basis of accounting unless the Directors either intend to liquidatethe Group or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the consolidated financial statementsOur objectives are to obtain reasonable assurance about whether the consolidated financialstatements, as a whole, are free from material misstatement, whether due to fraud or error, and toissue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,


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but is not a guarantee that an audit conducted in accordance with ISAs NZ and ISAs will always detecta material misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected to influencethe economic decisions of users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the financial statements is located at theExternal Reporting Board’s website at:

https://xrb.govt.nz/Site/Auditing_Assurance_Standards/Current_Standards/Page1.aspx

Who we report toThis report is made solely to the Company’s shareholders, as a body. Our audit work has beenundertaken so that we might state those matters which we are required to state to them in an auditor’sreport and for no other purpose. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the Company and the Company’s shareholders, as a body, for ouraudit work, for this report or for the opinions we have formed.

The engagement partner on the audit resulting in this independent auditor’s report is Julian Prior.

For and on behalf of:

Chartered Accountants Auckland24 February 2017


STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2016

2016 2015

SECTION NZ$’000 NZ$’000

Revenue 88,589 65,431

Total revenue 3 88,589 65,431

Sales and marketing expenses 7,100 4,567

Operating expenses 7.6 42,849 31,727

Administration expenses 7.6 22,949 17,995

Acquisition expenses 7.6 1,338 2,722

Foreign currency losses/(gains) 1,378 (1,742)

Total expenses 75,614 55,269

Operating Profi t 12,975 10,162

Finance costs (580) (503)

Finance income 480 462

Share of loss from associate 4.1 (914) -

Capital gain on sale of Vista China 4.1 41,069 -

Profi t before tax 53,030 10,121

Tax expense 8.1 (3,550) (3,981)

Profi t for the year 49,480 6,140

Profi t for the year is attributable to:

Owners of the parent 48,620 5,753

Non-controlling interests 860 387

49,480 6,140

Other comprehensive (loss)/income

Items that may be reclassifi ed to profi t or loss:

Exchange differences on translation of foreign operations, net of tax (1,779) 510

Total comprehensive income for the year 47,701 6,650

Total comprehensive income for the year is attributable to:

Owners of the parent 47,201 6,346

Non-controlling interests 500 304

47,701 6,650

Earnings per share for profi t attributable to the equity holders of the parent

Basic (cents per share) 6.2 $0.61 $0.07

Diluted (cents per share) 6.2 $0.60 $0.07

The above statement should be read in conjunction with the accompanying notes.


ATTRIBUTABLE TO THE OWNERS OF THE PARENT

NON-CONTROLLING

INTERESTSTOTAL

EQUITYCONTRIBUTED

EQUITYRETAINED EARNINGS

FOREIGN CURRENCY

RESERVE

SHARE-BASED PAYMENT RESERVE TOTAL

SECTION NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000

Balance at 1 January 2016 45,952 22,661 164 2,296 71,073 7,979 79,052

Profi t for the period - 48,620 - - 48,620 860 49,480

Other comprehensive loss - - (1,419) - (1,419) (360) (1,779)

Total comprehensive income - 48,620 (1,419) - 47,201 500 47,701

Issue of share capital 6.1 7,983 - - - 7,983 - 7,983

Share-based payments 6.3 75 - - 1,043 1,118 - 1,118

Disposal of Vista China 4.1 264 264 264

VCL share based payment 4.2 1,644 - (1,644) - - -

Acquisition of non-controlling interests

- - - - - 2,249 2,249

Balance at 31 December 2016 55,654 71,281 (991) 1,695 127,639 10,728 138,367

Balance at 1 January 2015 45,952 15,895 (429) 1,666 63,084 7,675 70,759

Profi t/(loss) for the period - 5,753 - - 5,753 387 6,140

Other comprehensive income - - 593 - 593 (83) 510

Total comprehensive income - 5,753 593 - 6,346 304 6,650

Share-based payments 6.3 - - - 1,643 1,643 - 1,643

2014 employee share based payment transactions - closed 2015

6.4 - 1,013 - (1,013) - - -

Balance at 31 December 2015 45,952 22,661 164 2,296 71,073 7,979 79,052


STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2016


2016 2015


CURRENT ASSETS

Cash 5.1 15,798 16,863

Short term deposits 5.1 5,540 10,437

Trade and other receivables 7.1 73,392 30,069

Income tax receivable 449 517

Total current assets 95,179 57,886

NON-CURRENT ASSETS

Property, plant and equipment 7.3 4,162 2,380

Investment in associate 4.1 / 4.4 27,669 -

Goodwill 4.3 50,285 41,109

Intangible assets 7.2 12,789 9,152

Deferred tax asset 8.2 1,541 220

Total non-current assets 96,446 52,861

Total assets 191,625 110,747

CURRENT LIABILITIES

Trade and other payables 7.5 14,519 6,637

Deferred revenue 22,473 14,476

Contingent consideration 4 3,122 1,253

Income tax payable 2,315 1,788

Total current liabilities 42,429 24,154

NON-CURRENT LIABILITIES

Borrowings 5.3 4,848 4,792

Deferred revenue 3,444 -

Employee benefi ts – VCL acquisition 343 468

Provisions 279 -

Deferred tax liability 8.2 1,915 2,281

Total non-current liabilities 10,829 7,541

Total liabilities 53,258 31,695

Net assets 138,367 79,052

EQUITY

Contributed equity 6.1 55,654 45,952

Retained earnings 71,281 22,661

Foreign currency revaluation reserve (991) 164

Share based payment reserve 6.3 1,695 2,296

Total equity attributable to owners of the parent 127,639 71,073

Non-controlling interests 4.4 10,728 7,979

Total equity 138,367 79,052

For and on behalf of the Board who authorised these fi nancial statements for issue on 24 February 2017.

Kirk Senior Executive Chairman Susan Peterson Chair Audit and Risk Committee


STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2016


2016 2015


CASHFLOWS FROM OPERATING ACTIVITIES

Receipts from customers 69,247 60,113

Interest received 476 462

Payments to suppliers (58,502) (50,527)

Taxes paid (5,484) (3,114)

Interest paid (317) (339)

Net cash infl ow from operating activities 5.2 5,420 6,595

CASHFLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (3,353) (1,059)

Purchase of intangible assets (4,890) (2,672)

Advance to associate (1,121) -

Acquisition of a business, net of cash acquired (7,163) (6,680)

Disposal of Vista China (1,439)

Net cash (applied to) investing activities (17,966) (10,411)

CASHFLOWS FROM FINANCING ACTIVITIES

Issue of ordinary shares 6.1 7,983 -

Net cash infl ow from fi nancing activities 7,983 -

Net decrease in cash and short term deposits (4,563) (3,816)

Cash and short term deposits at the beginning of the year 27,300 30,746

Foreign exchange differences (1,399) 370

Cash and short term deposits at end of year 5.1 21,338 27,300


STATEMENT OF CASHFLOWSFOR THE YEAR ENDED 31 DECEMBER 2016


General information

In the current year, the layout of these fi nancial statements has been updated to present them in a way that is easier for

the reader to understand. This has been achieved by including Accounting Policies and Critical Judgements alongside

the notes and focusing on presenting the information in a manner that increases clarity and ease of understanding.

The notes are consolidated into nine sections. Each section contains an introduction which is indicated by the

symbol above. The fi rst section outlines general information about Vista Group and guidance on how to navigate

through this document.

Accounting policies

The principal accounting policies adopted in the preparation of these fi nancial statements are set out throughout

the document where they are applicable. These policies have been consistently applied to all years presented,

unless otherwise stated.

Accounting policies are identifi ed by the symbol above.

Critical judgements and estimates in applying the accounting policies

Further details of the nature of these Critical Judgements and estimates may be found throughout the fi nancial

statements as they are applicable and are identifi ed by the symbol above.

1. GENERAL INFORMATIONThese consolidated fi nancial statements are for Vista Group International Limited (the ‘Company’ and its subsidiaries,

collectively ‘Vista Group’) which is a company incorporated and domiciled in New Zealand, and whose shares are

publicly traded on the New Zealand Stock Exchange (NZX) and the Australian Securities Exchange (ASX).

The Company is registered under the Companies Act 1993 and is an FMC reporting entity under Part 7 of the

Financial Markets Conduct Act 2013. The fi nancial statements of Vista Group have been prepared in accordance

with the requirements of Part 7 of the Financial Markets Conduct Act 2013 and the NZX Main Board Listing Rules.

In accordance with the Financial Markets Conduct Act 2013 because fi nancial statements are prepared and presented

for Vista Group, separate fi nancial statements for the Company are no longer required to be prepared and presented.

The principal activity of Vista Group is the sale, support and associated development of software for the fi lm industry.

These fi nancial statements were approved by the Directors on 24 February 2017.

2. BASIS OF PREPARATIONThis section outlines the legislation and accounting standards which have been followed in the preparation of these

fi nancial statements along with explaining how the information has been aggregated.

2.1 KEY LEGISLATION AND ACCOUNTING STANDARDS

The consolidated fi nancial statements of Vista Group have been prepared in accordance with Generally Accepted

Accounting Practice in New Zealand (NZ GAAP). Vista Group is a for-profi t entity for the purposes of complying with

NZ GAAP. The consolidated fi nancial statements comply with New Zealand equivalents to International Financial

Reporting Standards (NZ IFRS), other New Zealand fi nancial reporting standards and authoritative notices that

are applicable to entities that apply NZ IFRS. The consolidated fi nancial statements also comply with International

Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRS IC)

applicable to companies reporting under IFRS.

The fi nancial statements have been prepared on the basis of historical cost except for contingent consideration

which is measured at fair value.

NOTES TO THE FINANCIAL STATEMENTS


2.2 ADOPTION OF NEW ACCOUNTING STANDARDS

Certain new accounting standards and interpretations have been published that are not mandatory for 31 December

2016 reporting period and have not been early adopted by Vista Group. The key items applicable to Vista Group are:

NZ IFRS 15: Revenue from contracts with customers

(Effective date: annual periods beginning on or after 1 January 2018)

NZ IFRS 15 deals with revenue recognition and establishes principles for reporting useful information to users of

fi nancial statements about the nature, amount, timing and uncertainty of revenue and cash fl ows arising from an

entity’s contracts with customers. Revenue is recognised when a customer obtains control of a good or service

and thus has the ability to direct the use and obtain the benefi ts from the good or service. The standard replaces

NZ IAS 18 ‘Revenue’ and NZ IAS 11 ‘Construction contracts’ and related interpretations. The standard is effective for

annual periods beginning on or after 1 January 2018. Vista Group intends to adopt NZ IFRS 15 on its effective date

and has yet to assess its full impact.

NZ IFRS 9: Financial Instruments

(Effective date: annual periods beginning on or after 1 January 2018)

NZ IFRS 9 addresses the classifi cation, measurement and derecognition of fi nancial assets and fi nancial liabilities

and introduces new rules for hedge accounting. In July 2014, the IASB made further changes to the classifi cation

and measurement rules and also introduced a new impairment model. These latest amendments now complete

the new fi nancial instruments standard. The standard is effective for accounting periods beginning on or after

1 January 2018. Vista Group intends to adopt NZ IFRS 9 on its effective date and has yet to assess its full impact.

NZ IFRS 16: Leases

(Effective date: periods beginning on or after 1 January 2019)

NZ IFRS 16, ‘Leases’, which replaces the current guidance in NZ IAS 17, was published by the International Accounting

Standards Board (IASB) in January 2016. Under NZ IFRS 16, a contract is, or contains, a lease if the contract conveys

the right to control the use of an identifi ed asset for a period of time in exchange for consideration. Under NZ IAS 17,

a lessee was required to make a distinction between a fi nance lease (on balance sheet) and an operating lease (off

balance sheet). NZ IFRS 16 now requires a lessee to recognise a lease liability refl ecting future lease payments and

a ‘right-of-use asset’ for virtually all lease contracts. The IASB has included an optional exemption for certain short-

term leases and leases of low-value assets; however, this exemption can only be applied by lessees. The standard

is effective for accounting periods beginning on or after 1 January 2019. Early adoption is permitted but only in

conjunction with NZ IFRS 15, ‘Revenue from Contracts with Customers. Vista Group intends to adopt NZ IFRS 16

on its effective date and has yet to assess its full impact.

There are no other standards that are not yet effective and that would be expected to have a material impact

on Vista Group.

2.3 BASIS OF CONSOLIDATION

Vista Group’s fi nancial statements consolidate those of the Company, and its subsidiaries as at 31 December 2016.

A subsidiary is an entity over which Vista Group has control. Control is achieved when Vista Group is exposed,

or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns

through its power to direct the activities of the investee.

Consolidation of a subsidiary begins when Vista Group obtains control over the subsidiary and ceases when Vista

Group loses control of the subsidiary. Income and expenses of a subsidiary acquired or disposed of during the year

are included within the statement of comprehensive income from the date Vista Group gains control until the date

Vista Group ceases to control the subsidiary. All subsidiaries have a reporting date of 31 December. In preparing

the consolidated fi nancial statements, all inter entity balances and transactions and unrealised profi ts and losses

arising within the consolidated entity have been eliminated in full. A change in the ownership interest of a subsidiary

without a loss of control is accounted for as an equity transaction.

Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profi t or loss and net

assets that is not held by Vista Group. Vista Group attributes total comprehensive income or loss of subsidiaries to

the amounts of the Company and the non-controlling interests based on their ownership interests.



NOTES TO THE FINANCIAL STATEMENTSCONTINUED

Vista Group treats transactions with non-controlling interests that do not result in a loss of control as transactions

with equity owners of the group. A change in ownership interest results in an adjustment between the carrying

amounts of the controlling and non-controlling interests to refl ect their relative interests in the subsidiary. Any

difference between the amount of the adjustment to non-controlling interests and any consideration paid or

received is recognised in a separate reserve within equity attributable to the owners of the Company.

2.4 FOREIGN CURRENCY

Functional and presentation currency

Items included in the fi nancial statements of each of Vista Group’s entities are measured using the currency of the

primary economic environment in which the entity operates (‘the functional currency’). The consolidated fi nancial

statements are presented in New Zealand Dollars (NZD), which is Vista Group’s presentation currency. All fi nancial

information has been presented rounded to the nearest thousand dollars ($000).

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the

dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and

from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies

are recognised in the statement of comprehensive income.

Foreign Currency Translation Reserve (FCTR)

The FCTR is used to record exchange differences arising from the translation of the fi nancial statements of foreign

subsidiaries for consolidation purposes.

Group companies

The results and fi nancial position of all Vista Group entities (none of which has the currency of a hyper-infl ationary

economy) that have a functional currency different from the presentation currency are translated into the

presentation currency as follows;

(a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that

balance sheet

(b) income and expenses for each income statement and statement of other comprehensive income, are translated

at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of

the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on

the dates of the transactions);

(c) all resulting exchange differences are recognised in other comprehensive income

(d) goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and

liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised

in other comprehensive income

Foreign exchange gains and losses that relate to borrowings are presented in the statement of comprehensive

income, within fi nance costs. All other foreign exchange gains and losses are presented in the statement of

comprehensive income on a net basis within other expenses.

2.5 INVESTMENT IN ASSOCIATE

Associates are those entities over which Vista Group is able to exert signifi cant infl uence but which are not

subsidiaries or jointly controlled entities. Vista Group’s investment in an associate is accounted for using the equity

method. Under the equity method, the investment in an associate is initially recognised at cost. In the event of loss

of control of a subsidiary, resulting in an associate company, this is recognised initially at fair value. The carrying

amount of the investment in associates is increased or decreased to recognise Vista Group’s share of the profi t or

loss and other comprehensive income of the associate after the acquisition date. Dividends received or receivable

from associates and joint ventures are recognised as a reduction in the carrying amount of the investment.

When the Vista Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the

entity, including any other unsecured long-term receivables, Vista Group does not recognise further losses, unless

it has incurred obligations or made payments on behalf of the other entity. Unrealised gains on transactions

between Vista Group and its associates are eliminated to the extent of the Vista Group’s interest in these entities.




Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset

transferred. The carrying amount of equity-accounted investment is tested for impairment in accordance with

the policy described in section 7.4.

The fi nancial statements of the associate are prepared for the same reporting period as Vista Group. When

necessary, adjustments are made to bring the accounting policies in line with those of Vista Group.

2.6 GROUP INFORMATION

The fi nancial statements include the following signifi cant subsidiaries:

NAME PRINCIPAL ACTIVITYCOUNTRY OF INCORPORATION

SHAREHOLDING 2016

SHAREHOLDING 2015

Vista Entertainment Solutions Limited

Software development and licensing

New Zealand 100% 100%

Virtual Concepts Limited Holding company New Zealand 100% 100%

Movio Limited Provision of online loyalty data analytics and marketing

New Zealand 100% 100%

Movio Inc Provision of online loyalty data analytics and marketing

USA 100% 100%

MACCS International B.V. Software development and licensing

Netherlands 50.1% 50.1%

Vista Entertainment Solutions (UK) Limited

Software licensing United Kingdom 100% 100%

Vista Entertainment Solutions (USA) Inc

Software licensing USA 100% 100%

Vista Entertainment Solutions Shanghai Limited*

Software licensing China 39.5% 100%

Book My Show Limited Online cinema ticketing website New Zealand 74% 74%

Book My Show (NZ) Limited Online cinema ticketing website New Zealand 74% 74%

Share Dimension B.V. Software development and licensing

Netherlands 50% -

S.C. Share Dimension S.R.L Software development Romania 50% -

Flicks.co.nz Limited Advertising sales New Zealand 100% -

Powster Limited Marketing and creative solutions United Kingdom 50% -

*Vista Entertainment Solutions Shanghai Limited is no longer a subsidiary, see section 4.1 for details.

3. FINANCIAL PERFORMANCEThis section outlines further details of Vista Group’s fi nancial performance by building on information presented

in the Statement of Comprehensive Income

3.1 REVENUE

Revenue is recognised to the extent that it is probable that the economic benefi ts will fl ow to Vista Group and

the revenue can be reliably measured. The following specifi c recognition criteria must also be met before revenue

is recognised.




Products

Product revenue comprises the sale of computer software licenses and is recognised when the signifi cant risks

and rewards of ownership have been transferred by making the software usable to the licensee. No revenue is

recognised if there are signifi cant uncertainties regarding recovery of the consideration due, associated costs

or the possible non-implementation and return of the software. In 2016 a fee related to the sale of an exclusive

distribution right in China is recognised in this category. See section 4.1 for more detail.

Maintenance

Maintenance services are billed in advance for a fi xed term. Revenue is recorded within deferred revenue on the

statement of fi nancial position and recognised on a straight-line basis over the term of the contract billing period,

as services are provided.

Services

Services comprise of service fees which are one-off charges. Revenue is recognised when the service is complete

or on a stage of completion basis.

Development

Development revenue comprises the revenue associated with development effort as requested and paid for by

customers. This category includes revenue associated with development services to deliver the localisation of

Vista Group software under the reseller agreement with Vista China. See section 4.1.

Other revenue

Other revenue comprises revenue earned from advertising.

2016 2015

NZ$’000 NZ$’000

Product 39,153 21,750

Maintenance 35,124 31,427

Services 9,534 12,070

Development 4,321 -

Other 457 184

Total revenue 88,589 65,431

Critical judgements used in applying accounting policies and estimation uncertainty

As disclosed in 4.1, Vista Group entered into a reseller agreement with Vista China which included a number of

performance obligations made by Vista Group. Management has applied judgement and estimation in determining

the nature of these performance obligations, the time period over which these obligations will be satisfi ed, the

associated revenue for each obligation and from this the amount of revenue that has been recognised for the year

ended 31 December 2016.

3.2 SEGMENT REPORTING

Vista Group operates in a single vertical fi lm/cinema market and is structured through operating subsidiaries that

report monthly to the Chief Executive. The Chief Executive and the Board are considered to be the Chief Operating

Decision Maker in terms of NZ IFRS 8 Operating Segments.

Vista Group operates across four regions. Asia Pacifi c (APAC) which comprises primarily Vista China, note that

after the disposal of this entity (see section 4.1) non-current operating assets are reduced to nil in 2016 (2015:

$127,000). The other three regions comprise Europe, Middle East and Africa (EMEA), the United States and Canada

(Americas) and the Oceania region which consists of New Zealand and Australia, within which Vista Entertainment

Solutions Limited and the Company are included.

Revenue is reported via fi ve main sources – Product, Maintenance, Services, Development and Other, there is no

material indirect revenue source. No allocation of costs or assets is made against these revenue groups that would

enable disclosure of segmented information in this way.




Revenue is allocated to geographical regions on the basis of where the sale is recorded by each operating entity within

Vista Group. Independent resellers are used to promote the Vista products in multiple jurisdictions. The revenues

recognised via these independent resellers are not allocated geographically, rather they are shown within the

Oceania and EMEA regions.

Geographic information

REVENUE

2016 APAC EMEA AMERICAS OCEANIA

TOTAL

NZ$’000

Product 4,809 11,849 10,695 11,800 39,153

Maintenance 849 9,264 12,700 12,311 35,124

Services 334 5,892 2,460 848 9,534

Development 554 896 936 1,935 4,321

Other - - - 457 457

Total revenue 6,546 27,901 26,791 27,351 88,589

2015 APAC EMEA AMERICAS OCEANIA

TOTAL

NZ$’000

Product 1,611 5,385 6,894 7,860 21,750

Maintenance 2,207 7,899 11,246 10,074 31,426

Services 172 5,875 3,919 (309) 9,657

Development 184 613 643 974 2,414

Other - - 130 54 184

Total revenue 4,174 19,772 22,832 18,653 65,431

No individual customer exceeded 10% of revenue in 2016 or 2015.

Non-current operating assets by location are presented in the following table. Note that investment in associate

is excluded from the non-current assets balance presented.

Geographic information

NON-CURRENT OPERATING ASSETS

2016 2015

NZ$’000 NZ$’000

Oceania 34,498 26,981

APAC - 127

Americas 8,394 9,028

EMEA 25,885 16,725

Total non-current operating assets 68,777 52,861

4. ACQUISITIONS DISPOSALS AND BUSINESS COMBINATIONSThis section outlines how Vista Group has accounted for transactions to acquire new businesses and dispose

of an existing subsidiary and how this has impacted the fi nancial statements.

4.1 VISTA CHINA TRANSACTION

Transaction description

On 25 August 2016, Vista Group received fi nal regulatory approval to establish with Bejing Weying Technology

Co. Ltd (WePiao) a new venture in China. Under the terms of the agreement, WePiao has acquired a 55.4% equity

holding in Vista Entertainment Solutions (Shanghai) Limited (Vista China) via the combination of the purchase

from Vista Group of 18.3% of the existing shares in Vista China and the issue of new shares. On completion of the

transaction, Vista Group holds a 39.5% shareholding in Vista China, with the remaining 5.0% being held by a third




party. Due to the revised shareholding in Vista China and Board composition, Vista Group ceased to have effective

control of Vista China as of the completion date of the transaction. Holding two Board seats out of seven enables

Vista Group to exercise signifi cant infl uence over Vista China and therefore classifi es this entity as an Associate

and ceases to consolidate Vista China as of the completion date.

Under the Reseller Agreement, Vista China has been granted an exclusive distribution right for the initial period of

ten years within mainland China, with a right of renewal, to all existing Vista Group software including Vista Cinema,

VEEZI, Movio, MACCS and Numero. The Reseller Agreement specifi es the payment of Localisation fees to Vista

Group to cover the effort that must be invested to prepare Vista Group software products for further deployment in

the China market. Support and Maintenance fees are also payable under the Reseller Agreement to cover customer

support, training and upgrades to Vista Group software suite.

Gain on sale of Vista China

At the disposal date, the carrying value of the identifi able net assets in Vista China was $1.5m. Vista Group sold

18.3% of the shares in Vista China for $16.5m. The fair value of the retained 39.5% shareholding in Vista China has

been valued by an independent valuation expert at $28.6m. Vista Group has recognised a gain on sale of $41.1m,

calculated as follows:

2016

NZ$’000

Consideration received or receivable 16,533

Fair value of the 39.5% of Vista China retained by Vista Group 28,583

45,116

Less: carrying value of net assets of Vista China (1,511)

Transaction costs (2,272)

Foreign currency translation reserve (264)

Gain on sale of Vista China before income tax 41,069

Income tax expense -

Gain on sale of Vista China after income tax 41,069

Carrying amounts of Vista China

The carrying amounts of assets and liabilities for Vista China as at the date of sale 25 August 2016 were:

25 AUGUST 2016

NZ$’000

Total non-current assets 126

Cash 4,723

Trade and other receivables 3,681

Total current assets 8,404

Total assets 8,530

Total non-current liabilities (67)

Other current liabilities (926)

Trade and other payables (6,026)

Total liabilities (7,019)

Net assets 1,511

Vista China was consolidated as a subsidiary for the period through 31 August 2016. During this period the entity

contributed revenue of $6.7m and EBIT of $0.4m. Vista Group recognised an equity accounted loss for the period

after which Vista China ceased to be consolidated of $0.9m. As at 31 December 2016, Vista Group holds a sundry

receivable of $16.5m from WePiao for the purchase of 18.3% of the equity of Vista China. As at 31 December 2016,

Vista Group also holds a trade receivable of $19.0m from Vista China. See section 4.4 for more information.





Judgement and estimation is applied in determining the fair value of the 39.5% interest retained in Vista China

following the sale of the controlling shareholding to WePiao. An appropriately qualifi ed independent expert was

appointed by the Board who determined the fair value of the retained interest at $28.6m. The determination of this

amount was based on the sale price for the 18.3% of Vista China sold by Vista Group and the amount at which new

shares in Vista China were issued to WePiao, adjusted to refl ect a premium for control.

4.2 2016 ACQUISTIONS AND OTHER BUSINESS COMBINATIONS

Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of whether

equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary

comprises cash and the fair value of any asset or liability resulting from a contingent consideration arrangement.

Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are, with

limited exceptions, measured initially at their fair values at the acquisition date. Vista Group recognises any non-

controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-

controlling interest’s proportionate share of the acquired entity’s net identifi able assets.

Acquisition-related costs are expensed as incurred.

The excess of the:

• consideration transferred,

• amount of any non-controlling interest in the acquired entity; and

• acquisition-date fair value of any previous equity interest in the acquired entity

over the fair value of the net identifi able assets acquired is recorded as goodwill. If those amounts are less than

the fair value of the net identifi able assets of the subsidiary acquired, the difference is recognised directly in the

statement of comprehensive income as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted

to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate,

being the rate at which a similar borrowing could be obtained from an independent fi nancier under comparable

terms and conditions.

Contingent consideration is classifi ed either as equity or a fi nancial liability. Amounts classifi ed as a fi nancial liability

are subsequently remeasured to fair value with changes recognised in the statement of comprehensive income.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously

held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising

from such remeasurement are recognised in the statement of comprehensive income.

POWSTER LIMITED

On 1 April 2016, Vista Group acquired a 50% shareholding in Powster Ltd (Powster). Powster is a London based

business that provides bespoke marketing concepts and creative solutions to the fi lm and entertainment industry.

This strategic acquisition continues Vista Group’s strategy of creating a comprehensive suite of technology

solutions for the global fi lm industry. Vista Group will benefi t from Powster’s capability to deliver innovative digital

marketing and operational solutions for distributors and exhibitors and as a result it will enhance Vista Group’s

product offering to studios. Powster will benefi t from potential cost effi ciencies from being part of Vista Group

as well as leveraging Vista Group’s relationships across its geographic locations and customer base.

The terms of the acquisition achieve effective control of Powster via Vista Group’s ability to exercise majority voting

rights. Accordingly, the investment in Powster is treated as a subsidiary and consolidated at the acquisition date.




Details of the purchase consideration, the net assets acquired and goodwill are as follows:

NZ$’000

Cash 7,188

Contingent consideration 2,493

Total purchase consideration 9,681

The assets and liabilities recognised as a result of the acquisition are as follows:

NZ$’000

Property, plant and equipment 65

Cash on hand 1,994


Tax payable (726)

Trade and other payables (134)

Net identifi able assets acquired 3,094

Non-controlling interest 1,547

Goodwill 8,134


The fair value of trade receivables is $1.54m with no bad debt provision required as all customer accounts are

deemed to be fully performing. The total amount of accounts receivable past due but not impaired was $0.9m.

Contingent consideration

The purchase agreement includes contingent consideration. Contingent consideration is payable in two tranches to

be paid in April 2017 and April 2018 respectively. The Payment tranches are based upon the achievement of EBITDA(1)

for the FY2016 and FY2017 periods. For the purposes of quantifying the amounts payable for each respective

tranche, an estimate has been developed based on the expected performance of the Powster business for these

fi nancial years. The assumptions used have been validated by senior management. The estimated cashfl ows for

each tranche have been discounted back to the balance date at a cost of capital of 8%, to be unwound over the

period of the tranche as a fi nance charge.

At the acquisition date, the fair value of the contingent consideration was estimated to be $2.5m. There has been

no change to this estimate as at 31 December 2016. The maximum amount payable under the purchase agreement

is uncapped, based on fi nancial performance.

Goodwill

Goodwill is attributable to Powster’s ability to enable Vista Group to increase the breadth of its product offering

to studios. Goodwill is also attributable to Powster’s cost effi ciencies provided by access to Vista Group’s

infrastructure and customer network. Goodwill is not deductible for tax purposes.

Vista Group elected to measure the non-controlling interest in the acquiree as a proportion of net assets acquired.

Revenue included in the consolidated income statement from 1 April 2016 to 31 December 2016 is $3.9m. Powster

contributed net profi t before tax of $2.1m for the same period. Had Powster been consolidated from 1 January

2016, the impact on the statement of comprehensive income for the period ended 31 December 2016 would have

been an increase in revenue to $5.0m and an increase in net profi t before tax to $2.3m.

SHARE DIMENSION BV

On 4 January 2016, Vista Group acquired a 50% shareholding in Share Dimension B.V. a Netherlands based

software development company. Share Dimension B.V. and its subsidiary S.C. Share Dimension S.R.L. are Dutch

and Romanian software development companies respectively, specialising in predictive analytics applications for

cinema exhibitors. Their fl agship product Cinema Intelligence, offers a collection of modules aimed at optimising

the scheduling of fi lms to increase the profi tability of cinema exhibitors.

(1) EBITDA is defi ned as earnings before net fi nance expenses, income tax, depreciation and amortisation.




The strategic partnership presents benefi ts to both parties. Share Dimension gains market access opportunities

to Vista Group’s customer network, whilst Vista Group gains access to new and additional technology for its

customers. Creating a strong integration between the products will increase the velocity of the uptake of the

Share Dimension product.

Vista Group acquired a 50% shareholding in Share Dimension. Effective control of Share Dimension is achieved as

a result of Vista Group controlling the majority voting rights of the Supervisory Board. Accordingly, the investment

in Share Dimension is treated as a subsidiary and consolidated as of the acquisition date. Details of the purchase

consideration, the net assets acquired and goodwill are as follows:

NZ$’000

Cash 2,235



NZ$’000


Intangible assets 419

Cash on hand 701

Trade and other receivables 409


Net identifi able assets acquired 1,014

Non-controlling interest 507

Goodwill 1,728


Goodwill

Goodwill is attributable to integrating Share Dimension’s technology platform creating new opportunities and

markets for Vista Group. Goodwill is not deductible for tax purposes.

Contingent consideration

The purchase agreement includes contingent consideration. Contingent consideration is payable in two tranches

to be paid in April 2017 and April 2018 respectively. The payment tranches are based upon the achievement of

specifi ed total revenue, recurring revenue and EBITDA(1) targets for the FY2016 and FY2017 periods. Based on the

forecasts provided by Share Dimension, an estimate has been developed to calculate the amounts payable for both

these fi nancial years. The calculation assumptions used have been validated by senior management. At acquisition

date and 31 December 2016, the fair value estimate of the contingent consideration payable is nil. The maximum

amount of contingent consideration payable under the purchase agreement is uncapped, based on fi nancial

performance.

Vista Group elected to measure the non-controlling interest in the acquiree as a proportion of net assets acquired.

Revenue included in the consolidated income statement from 1 January 2016 to 31 December 2016 is $0.58m.

Share Dimension contributed a net loss before tax of $1.31m for the same period.

FLICKS.CO.NZ LIMITED

On 8 April 2016, Vista Group acquired 100% of the shares of Flicks.co.nz Limited (Flicks), a company based

in Auckland, New Zealand. Flicks is New Zealand’s most complete and up-to-date source of movie, cinema and

session time information.

Vista Group acquired Flicks because of its strong position in the New Zealand cinema industry and the potential

for synergies to be realised through combination with Vista Group.

(1) EBITDA is defi ned as earnings before net fi nance expenses, income tax, depreciation and amortisation.




Details of the purchase consideration, the net assets acquired and goodwill are as follows:

NZ$’000

Cash 604

Deferred purchase price 130

Total purchase consideration 734


NZ$’000


Intangible assets 38

Cash on hand 55

Trade receivables 78


Net identifi able assets acquired 130

Goodwill 604

Total purchase consideration 734

The fair value of trade receivables is $78,000 with any individual debts that were known to be uncollectable

written off in the period within which they were identifi ed.

Goodwill

Goodwill is attributable to Flicks’ strong position in the New Zealand cinema industry and the potential for synergies

to be realised when combined within Vista Group. Goodwill is not deductible for tax purposes.

The deferred purchase price of $0.14m (20% of the purchase price) is to be paid on the fi rst anniversary following

the completion date. The payment of the deferred purchase price was contingent at the time of the transaction

upon the achievement of certain performance criteria for the year ended 31 March 2016. Upon receipt of the

31 March 2016 accounts, it was deemed that the performance criteria were achieved and therefore the deferred

purchase price is expected to be paid and is therefore recognised as part of the business combination.

The deferred purchase price payment is discounted for one year at 8%. Therefore, the total amount recognised

as part of the business combination is $0.13m with a fi nance charge over the period 1 April 2016 to 31 March 2017.

The acquired business contributed revenues of $0.45m and net profi t before tax of $0.06m to Vista Group for

the period 8 April 2016 to 31 December 2016. Had Flicks been consolidated from 1 January 2016, the impact on the

statement of comprehensive income for the full year period ended 31 December 2016 would have been an increase

in revenue to $0.58m and an increase in net profi t before tax to $0.09m.

VIRTUAL CONCEPTS LIMITED (VCL) – acquisition of remaining 43% of share capital in 2014

The acquisition of the remaining 43% of VCL (trading as Movio Limited) in August 2014 included contingent

consideration that was payable to the former owners in the form of cash and shares. Contingent consideration

is payable in three tranches on 1 April 2016, 1 April 2017 and 1 April 2018. As at 31 December 2016, the fi rst

tranche had been paid in line with the estimate made at 31 December 2015 and amounted to $0.7m in cash and

$1.6m in shares. At the reporting date, the fair value of the remaining contingent consideration to be paid in the

second tranche in 2017 was revised down by $0.5m. Amounts related to the third tranche payable in 2018 remain

unchanged and currently expected to be paid on the date specifi ed above.




The table summarises the changes in estimates in the contingent consideration for VCL:

TOTAL CONTINGENT CONSIDERATION AT 31 DECEMBER 2016

REVISED ESTIMATE

ORIGINAL ESTIMATE MOVEMENT

NZ$’000 NZ$’000 NZ$’000

- Cash (current) 1,063 1,226 (163)

- Cash (non-current) 343 343 -

- Cash (Shares) 936 1,247 (311)

2,342 2,816 (474)

Vista Group has recognised a liability in regards to amounts to be settled in shares of $0.9m. This will be settled by

a variable number of shares depending upon the share price at exercise. The number of shares will be based upon

the average share price for the 30 days preceding exercise date.

Further details related to the acquisition of VCL are included in the 2015 Annual Report.

TICKETSOFT

In April 2015, Vista Group acquired the assets of US based cinema software company Ticketsoft. The total consideration

to acquire the assets of Ticketsoft included contingent consideration of $1.8m, payable quarterly through to September

2016. Payment is based upon the achievement of certain performance obligations, primarily the number of sites

transitioned to Vista Group software. During 2015, $0.5m was paid out as contingent consideration based on sites

deployed during that period.

At 31 December 2016, the estimated total pay-out under the contingent consideration has been adjusted down

from $1.75m to $1.15m. The updated calculation is based upon a revised estimate of the number of sites expected to

transition. The impact of $0.6m from the revised estimate is recognised through the Statement of Comprehensive

Income within acquisition costs.

PREVIOUS ACQUISITIONS

Details of acquisitions during the year ended 31 December 2015 are included in the 2015 Annual Report.

4.3 GOODWILL

2016 2015

NZ$’000 NZ$’000

Gross carrying amount

Balance 1 January 44,663 37,270

Acquisition through business combinations (see section 4.2) 10,466 7,015

Disposals - -

Exchange differences (1,290) 378

Balance 31 December 53,839 44,663

Accumulated impairment

Balance 1 January (3,554) (3,554)

Balance 31 December (3,554) (3,554)

Carrying amount 31 December 50,285 41,109




Goodwill can be analysed as follows:

2016 2015

NZ$’000 NZ$’000

Vista Entertainment Solutions Limited (VESL) 12,865 12,461

Virtual Concepts Limited (VCL) 16,970 16,965

MACCS International BV (MACCS) 11,165 11,683

Share Dimension BV (Share Dimension) 1,762 -

Powster Limited (Powster) 6,919 -

Flicks.co.nz Limited (Flicks) 604 -

Goodwill allocation at 31 December 50,285 41,109

The Directors have carried out an annual impairment review of goodwill allocated to the CGU’s, in order to ensure that

recoverable amounts exceed aggregate carrying amounts (see section 7.4 for key assumptions and sensitivity analysis).

4.4 OTHER RELATED PARTIES

ASSOCIATE COMPANIES

Vista China

Vista Group has a 39.5% interest in Vista China (see section 4.1 for details), a material associate company that has

been accounted for using the equity method in the consolidated fi nancial statements. Vista Group commenced equity

accounting for Vista China, formerly a subsidiary, on the date after which control ceased, being 1 September 2016.

Subsequent to 1 September 2016, the types of related party transactions undertaken were defi ned under the reseller

agreement. The reseller agreement specifi es transactions related to localisation work, support and maintenance

fees and payment for an exclusive 10 year distribution right for all Vista Group software with a right of renewal

for another 10 year period. At the commencement date of the transaction with WePiao there was an outstanding

receivable of $3.9m from Vista China which is included in the total outstanding balance as at 31 December 2016.

ENTITY NATURE OF TRANSACTIONS

RECEIVABLES/(PAYABLE)


2016 2015

NZ$’000 NZ$’000

Vista Entertainment Solutions Shanghai Limited Related party receivable 19,010 -

Vista Entertainment Solutions Shanghai Limited Related party payable (1,280) -

Total exposure 17,730 -

Related party transactions for the 4 months ended 31 December 2016 include:

31 DECEMEBER 2016

NZ$’000

License fees 2,462

Development fees 5,793

Maintenance fees 5,572

Receivable owing prior to associate status 5,183

Total 19,010

As at 31 December 2016, only $3.4m of the fees identifi ed above had been recognised as revenue in Vista Group

with the remaining balance of $16.6m held on the Statement of Financial Position as deferred revenue which is

estimated to be earned and recognised over the next 3 years.

All of the related party transactions during the period were made on normal commercial terms and no amounts

owed by related parties have been provided for, written off or forgiven during the period.




A summarised income statement for Vista China and a reconciliation to the equity accounted loss recognised in Vista

Group is detailed below for the four month period subsequent to disposal. This has been amended to refl ect adjustments

made by entity when using the equity method including modifi cations for differences in accounting policies.

RESULT FOR THE FOUR MONTH PERIOD ENDING 31 DECEMBER 2016 NZ$’000

Revenue 3,391

Total expenses (5,740)

Operating loss (2,349)

Finance income 37

Loss for the period (2,312)

Vista Group equity accounted interest 39.5%

Vista Group equity accounted loss for the period (914)

A summarised statement of fi nancial position as at 31 December 2016 is presented below:

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016 NZ$’000

Cash 40,173


Total current assets 48,429

Total non-current assets 154

Total assets 48,583

Total current liabilities (27,656)

Net assets 20,927

Total equity 20,927

The carrying value of the investment in associate held by Vista Group is detailed below:

Carrying value as at 31 August 2016 28,583

Equity accounted loss for the period (914)

Investment in associate 27,669

Numero Limited

Vista Group has a 50% interest in Numero Limited, an associate that is accounted for using the equity method in

the consolidated fi nancial statements. Vista Group has ceased to recognise further losses during the year related

to Numero as accumulated losses would exceed Vista Group’s equity interest.

Vista Group’s related parties include its associate company, Numero Limited. All of the related party transactions

during the period were made on normal commercial terms and no amounts owed by related parties have been

provided for, written off or forgiven during the period (2015: $Nil).

The types of related party transactions undertaken during the period relate to recharges for development work

undertaken and advances made.




ENTITY NATURE OF TRANSACTIONS



2016 2015

NZ$’000 NZ$’000

Numero Limited Related party loan 2,621 1,500

Numero Limited Constructive obligation (50) (50)

Numero Limited Related party receivable 2,792 1,910

Total 5,363 3,360

The related party transactions incurred during the year include:

31 DECEMEBER 2016

NZ$’000

Recharges - license fees 396

Recharges - development fees 523

Recharges - other advances (37)

Total 882

The amounts receivable are unsecured and no guarantees are in place. Vista Group can call the debt recognised

as an intercompany receivable at any time. Interest of 10% is charged against the intercompany loan per the loan

agreement. The Company has not recorded any impairment of the balance receivable as at 31 December 2016

(2015: $Nil) due to the Board’s confi dence in future performance of Numero, based on the budget for the coming

year and forecasts beyond 2017.

Vista Group ceased to recognise further losses related to the associate company Numero in 2015. Losses were previously

recognised to the extent of the value held in equity for Numero, however this has now been offset by Vista Group’s share

of losses. During the year Numero made a loss of $1.26m, Vista Group’s share being $0.63m (2015: $0.75m).

At balance date, Vista Group has continued to recognise a constructive obligation of $50,000 (2015: $50,000).

COMPENSATION OF KEY MANAGEMENT PERSONNEL

Key management personnel include Vista Group’s Board of Directors and senior management.

Key management personnel remuneration includes the following expenses:

2016 2015

NZ$’000 NZ$’000

Salaries including bonuses 2,730 1,762

Share based payments - 36

Directors fees 236 305

During 2016 the number of employees classifi ed as senior management increased from six at the end of 2015

to ten, due to organisational changes and acquisitions. Effective from 1 July 2016, Kirk Senior, Chairman of Vista

Group became Executive Chairman and his remuneration was reclassifi ed from that point onwards from Directors

fees to Salaries including bonuses in the table above.




5. CASH AND CASHFLOWSThis section builds on information from the Statement of Cashfl ows and provides details on the cash and short

term deposits held on the Statement of Financial Position. This section also provides details of a range of fi nancial

risks associated with these balances and how Vista Group manages these risks.

5.1 CASH AND SHORT TERM DEPOSITS

Cash

Cash comprises cash at bank and on hand.

Short term deposits

Short term deposits, which are subject to an insignifi cant risk of changes in value are presented on the statement

of fi nancial position.

2016 2015

NZ$’000 NZ$’000

Cash 15,798 16,863

Short term deposits 5,540 10,437

Total cash and short term deposits 21,338 27,300

5.2 RECONCILIATION OF NET SURPLUS TO CASH FLOWS

2016 2015

NZ$’000 NZ$’000

Net profi t/(loss) after tax 49,480 6,140

Non-cash items:

Amortisation 2,308 1,216

Depreciation 1,044 781

Share based payment expense 1,118 2,259

Unwinding of discount on contingent consideration 289 164

Capital gain on sale of Vista China (41,069) -

Acquisition expenses 1,068 -

Loss from investment in associate 914 -

Foreign exchange movements (295) (872)

Allowance for bad debts (25) 36

(34,648) 3,584

Movements in working capital

Increase/(decrease) in related party in trade and other payables 1,171 -

(Increase)/decrease in related party trade and other receivables, net of deferred revenue

(5,183) -

Increase/(decrease) in trade and other payables 9,551 1,322

(Increase)/decrease in trade and other receivables, net of deferred revenue (12,986) (5,318)

Increase/(decrease) in taxation receivable and payable (1,965) 867

Net change in working capital (9,412) (3,129)

Net cash fl ows from operating activities 5,420 6,595




5.3 BORROWINGS

Borrowings are initially recognised at fair value less directly attributable transactions costs and subsequently

measured at amortised cost using the effective interest method. Borrowing costs are expensed as incurred.

In November 2013, Vista Group established a $2.0m commercial credit facility with ASB Bank Limited to fund

working capital requirements. The interest rate is fl oating at 6.10% (2015: 6.4%) per annum with no set expiry

date. At balance date, there was no draw down against this facility.

In March 2014, Vista Group established a EUR 3.0 million facility with ASB Bank Limited to acquire 25.1% of the

share capital of MACCS International BV. The loan matures on 12 March 2020 and the current interest rate is

2.85% (2015: 2.66%) per annum.

Security for both the commercial credit facility and the Euro loan with ASB Bank Limited is secured by a general

security agreement under which the bank has a security interest in all Vista Group’s tangible assets. Covenants

in place include a total equity and EBITDA covenant which are reported quarterly. Vista Group has been fully

compliant with all covenants for the year.

2016 2015

NZ$’000 NZ$’000

Related party loan 303 -

Bank borrowings 4,545 4,792

Total borrowings 4,848 4,792

5.4 FINANCIAL RISK MANAGEMENT

Vista Group is exposed to three main types of risks in relation to fi nancial instruments, which are market (foreign

currency risk and interest rate risk), credit and liquidity.

Vista Group’s risk management framework is set by the Board and implemented by management. It’s focus includes

actively monitoring and securing Vista Group’s short to medium-term cash fl ows by minimising the exposure to

fi nancial markets. The most signifi cant fi nancial risks to which Vista Group is exposed are described below.

Foreign currency risk

Most of Vista Group’s transactions carry a component that is ultimately repatriated back to NZD. Exposures to

currency exchange rates arise from overseas sales, which are primarily denominated in US dollars (USD), Pounds

Sterling (GBP), Australian dollars (AUD) and Euros (EUR).

To mitigate exposure to foreign currency risk, non-NZD cash fl ows are monitored in accordance with the Vista

Group’s risk management policies. Vista Group’s risk management policies include treasury management and

foreign exchange policies the implementation of which is set and reviewed regularly by the Board. Vista Group’s risk

management procedures distinguish short-term foreign currency cash fl ows (due within 6 months) from longer-term

cash fl ows (due after 6 months). Where the amounts to be paid and received in a specifi c currency are expected to

largely offset one another, no further hedging activity is undertaken. The foreign exchange policy does allow for the

use of hedging activity, however to date these instruments have not been utilised.




Foreign currency denominated fi nancial assets and liabilities which expose Vista Group to currency risk are disclosed

below. The amounts shown are those reported to key management translated into NZD at the closing rate:

USD GBP EUR AUD RMB

NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000

31 DECEMBER 2016

Financial assets

Cash 6,390 3,220 2,835 984 -

Trade receivables 14,912 4,676 3,978 979 13,827

Sundry receivables - - - - 16,510

Financial liabilities

Trade payables (677) (260) (376) (188) (2,197)

Borrowings - - (4,848) - -

Contingent consideration (735) (2,250) - - -

Total exposure 19,890 5,386 1,589 1,775 28,140

31 DECEMBER 2015

Financial assets

Cash 5,050 8 324 137 1,329

Trade receivables 7,460 77 1,437 942 2,010

Sundry receivables - - - - -

Financial liabilities -

Trade payables (62) - (30) (2) (27)

Borrowings - - (4,792) - -

Contingent consideration (1,253) - - - -

Total exposure 11,195 85 (3,061) 1,077 3,312

The following table illustrates the sensitivity of profi t or loss and equity in regards to Vista Group’s fi nancial assets

and fi nancial liabilities affected by USD/NZD exchange rate the GBP/NZD exchange rate, the EUR/NZD exchange

rate and AUD/NZD exchange rate ‘all other things being equal’. It assumes a +/- 10% change of the NZD/USD

exchange rate for the year ended at 31 December 2016 (2015: 10%). A +/- 10% change is considered for the

NZD/GBP exchange rate (2015: 10%). A +/- 10% change is considered for the NZD/AUD exchange rate (2015: 10%).

A +/- 10% change is considered for the NZD/EUR exchange rate (2015: 10%). These percentages have been

determined based on the average market volatility in exchange rates in the previous 12 months. The sensitivity

analysis is based on Vista Group’s foreign currency fi nancial instruments held at each reporting date.

PROFIT/EQUITY

USD GBP EUR AUD RMB

NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000

31 December 2016 -

10% strengthening in NZD (1,808) (490) (144) (161) (2,558)

10% weakening in NZD 2,210 598 177 197 3,127

31 December 2015

10% strengthening in NZD (1,018) (8) 278 (98) -

10% weakening in NZD 1,244 9 (340) 120 -

Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions.

Nonetheless, the analysis above is considered to be representative of Vista Group’s exposure to market risk.

Interest rate risk

Vista Group’s interest rate risk primarily arises from long-term borrowing, cash, short term deposits and advances to

associates. Borrowings and deposits at variable rates expose Vista Group to cash fl ow interest rate risk. Borrowings

and deposits at fi xed rates expose Vista Group to fair value interest rate risk.




The following tables set out the interest rate repricing profi le and current interest rate of the interest bearing

fi nancial assets and liabilities.

AS AT 31 DECEMBER 2016

EFFECTIVE INTEREST

RATE

FLOATINGFIXED UP TO

3 MONTHSFIXED UP TO

6 MONTHSFIXED UP TO

5 YEARS TOTAL

NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000

Assets

Advance to Numero 10% - - - 2,621 2,621

Short term deposits 2.33% - 5,540 - - 5,540

Cash 15,798 - - - 15,798

15,798 5,540 - 2,621 23,959

Liabilities

Bank borrowings 2.85% - - - (4,545) (4,545)

Related party loan 5% - - - (303) (303)

- - - (4,848) (4,848)

Total exposure 15,798 5,540 - (2,227) 19,111

Profi t or loss is sensitive to higher/lower interest income/expense from cash and short term deposits as a result

of changes in interest rates.


EFFECTIVE INTEREST RATE

+1%

EFFECTIVE INTEREST RATE

-1%

NZ$’000 NZ$’000

Assets

Cash 158 (158)

Short term deposits 5 (5)

Total exposure 163 (163)

Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to Vista Group. Vista Group is exposed

to this risk for various fi nancial instruments, for example trade and sundry receivables and deposits with fi nancial

institutions. The maximum exposure to credit risk is limited to the carrying amount of fi nancial assets recognised

at 31 December, as summarised section 9.4.

Vista Group continuously monitors defaults of customers and other counterparties, identifi ed either individually

or by Vista Group, and incorporates this information into its credit risk controls. Vista Group’s policy is to deal

only with creditworthy counterparties.

At 31 December Vista Group has certain trade receivables that have not been settled by the contractual due date

but are not considered to be impaired because of the nature of contracts and the longevity of ongoing customer

relationships. The amounts at 31 December, analysed by the length of time past due, are:

2016 2015

NZ$’000 NZ$’000

Not more than 3 months 10,881 8,450

Between 3 months and 4 months 580 1,267

Over 4 months 4,241 3,988

15,702 13,705




As at 31 December 2016, Vista Group holds a receivable from its associate company, Vista Entertainment Solutions

Shanghai Limited, amounting to $19.0m, $5.2m of which is presented above and is not more than 3 months past

due. The transaction driving this receivable primarily relates to the WePiao transaction as Vista China ceased to

be a subsidiary and became an associate. See section 4.1 for more detail.

In respect of trade receivables, Vista Group is not exposed to any signifi cant credit risk exposure to any single

counterparty or any group of counterparties having similar characteristics. Trade receivables consist of a large number

of customers in various industries and geographical areas. Based on historical information about customer default

rates, management considers the credit quality of trade receivables that are not past due or impaired to be good.

The credit risk for cash and short term deposits is considered negligible, since the counterparties are reputable

banks with high quality external credit ratings.

Liquidity risk

Liquidity risk is the risk that Vista Group might be unable to meet its obligations. Vista Group’s objective is to

maintain a balance between continuity of funding and fl exibility through monitoring of cash and short term deposits

and the use of bank overdrafts and bank loans (see section 5.3). Vista Group’s policy is that not more than 25% of

borrowings should mature in the next 12-month period. No debt will mature in less than one year at 31 December

2016 (2015: Nil) based on the carrying value of borrowings refl ected in the fi nancial statements. Vista Group

assessed the concentration of risk with respect to refi nancing its debt as being low. Access to sources of funding

is suffi ciently available and debt maturing within 12 months can be rolled over with existing lenders.

Vista Group has signifi cant cash balances held as cash on hand and in short term deposits of $21.3m (refer section 5.1).

The dividend policy is to distribute between 30% to 50% of net profi t after tax subject to immediate and future growth

opportunities and identifi ed capital expenditure requirements. At balance date Vista Group has a NZD $2m on call

credit facility with the ASB, against which there has been no draw down.

The table below summarises the maturity profi le of Vista Group’s non-derivative fi nancial liabilities based on

contractual undiscounted payments.

ON DEMANDLESS THAN 3 MONTHS

3 TO 12 MONTHS

1 TO 5 YEARS > 5 YEARS TOTAL

NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000

2016

Trade payables - 6,229 - - - 6,229

Sundry accruals - 4,231 - - - 4,231

Borrowings - - - 4,848 - 4,848

Interest on borrowings - 32 97 308 - 437

Contingent consideration - - 3,122 - - 3,122

- 10,492 3,219 5,156 - 18,867

2015

Trade payables - 762 - - - 762

Sundry accruals - 2,918 - - - 2,918

Borrowings - - - 4,792 - 4,792

Interest on borrowings - 32 96 22 - 150

Contingent consideration - - 1,253 - - 1,253

- 3,712 1,349 4,814 - 9,875




6. CAPITAL STRUCTUREThis section outlines Vista Group’s capital structure and details of share based employee incentives which have

an impact on Vista Group’s equity.

Equity, reserves and dividend payments

Share capital represents the nominal value of shares that have been issued. Incremental costs directly attributable

to the issue of ordinary shares are recognised as a deduction from equity. Retained earnings include all current and

prior period retained profi ts. Dividend distributions payable to equity shareholders are included in trade and other

payables when the dividends have been approved by the Board on or before the end of the reporting period but

not yet distributed. All transactions with owners of the Parent are recorded separately within equity.

All shares are ordinary authorised, issued and fully paid shares. They all have equal voting rights and share equally

in dividends and any surplus on winding up. The shares have no par value.

6.1 CONTRIBUTED EQUITY

2016 2015 2016 2015

NO. OF SHARES 000’S

NO. OF SHARES 000’S NZ$’000 NZ$’000

Shares issued and fully paid:

Beginning of the year 79,973 79,973 45,952 45,952

Ordinary shares issued during the year 1,967 - 9,702 -

Total shares authorised at 31 December 81,940 79,973 55,654 45,952

During the 2016 fi nancial year, 1,967,204 shares were issued (2015: Nil). A total of 314,076 shares were issued for

no consideration in respect to share-based payments related to VCL contingent consideration (refer section 4.2).

A total of 14,323 shares were issued in respect to an employee incentive agreement for no consideration. A total

of 1,638,805 representing 2% of total Vista Group shares were issued to Weying NZ (BVI) Limited, a 100% owned

subsidiary of Vista Group’s China joint partner WePiao for consideration of $8.0m. Refer to section 4.1 for detail.

6.2 EARNINGS PER SHARE AND DIVIDENDS

Earnings per share

Vista Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated

by dividing the profi t or loss attributable to ordinary shareholders of the Parent by the weighted average number

of ordinary shares in issue during the year.

Diluted EPS refl ects any commitments Vista Group has to issue shares in the future that would decrease EPS. In

2016, these are in the form of share based payments and performance rights. To calculate the impact it is assumed

that share based payments related to FY16 earning targets are achieved and all the performance rights are taken,

therefore adjusting the weighted average number of shares.

The following refl ects the income and share data used in the basic and diluted EPS computations:

2016 2015

NZ$’000 NZ$’000

Profi t attributable to ordinary shareholders of the Parent for basic earnings 48,620 5,753

Profi t attributable to ordinary shareholders of the Parent adjusted for the effect of dilution

48,620 5,753

Weighted average number of shares in basic earnings per share 80,356 79,973

Shares deemed to be issued for no consideration in respect of share-based payments

434 203

Weighted average number of shares used in diluted earnings per share 80,932 80,463

EPS $0.61 $0.07

Diluted EPS $0.60 $0.07




Dividends

Vista Group intends to pay an annual dividend for 2016. The dividend at 50%, will be at the top end of the policy

range. This will be based on the profi t after tax for the year attributable to owners of the parent after adjustment

for the capital gain related to the disposal of Vista China.

6.3 SHARE BASED PAYMENTS

Equity settled long term incentive scheme

During the 2015 fi nancial year, the Directors approved and implemented an equity settled long-term incentive

scheme for selected key management personnel. During the 2016 fi nancial year the Directors issued the 2016

Long Term Incentive Scheme, under identical terms and conditions. The Long Term Incentive Scheme is intended

to focus performance on achievement of key long term performance metrics, refer to section 6.4 for more details

of the scheme.

Share based payment reserve

The share based payment reserve is used to record any equity share based incentives. The reserve value represents

the difference between the value at the time of allocation and the cash received incentives plus the equity component

of contingent consideration payable.

6.4 EQUITY SETTLED LONG TERM INCENTIVE SCHEME

During 2016, the Directors approved the second annual issue of an equity settled Long Term Incentive Scheme

implemented in 2015 for selected key management personnel (“Participants”). The plan is intended to focus

performance on achievement of key long term performance metrics.

The allocation of performance rights is based on a percentage of annual base salary, adjusted by a risk factor

calculated using the Monte Carlo valuation model. Performance rights are granted under the plan for no consideration

and carry no dividend or voting rights. Participation in the scheme is at the Board’s discretion and participants in the

scheme are not guaranteed a place from year to year.

The amount of performance rights that will vest depends on Vista Group’s relative Total Shareholder Return

(“TSR”) to shareholders. Vesting of performance rights is dependent upon Vista Group achieving relative TSR

targets over a two and three year performance period, against all other NZX50 companies (excluding Vista Group),

with 50% of the value of rights allocated under each target. Vesting of the performance rights is defi ned by the

following table:

PERCENTILE PERFORMANCE AGAINST NZX50 COMPANIES VESTING PERFORMANCE RIGHTS

Less than 50th percentile Zero

50th - 75th percentile 50% to 75% pro-rata on a straight line basis

Greater than 75th percentile 100%

TSR is measured by the change in TSR from the start date of the grant period until the end of the performance

period (two years and three years). The scheme allows the carry forward of any performance rights that do not vest

in the fi rst vesting period to be eligible to vest in the vesting period for the second tranche of performance rights.

The scale at which carried over rights may vest at the end of the tranche two vesting period shall commence at the

TSR percentile achieved in respect of the tranche one vesting period.

The fair value of rights granted is recognised as an employee expense in the statement of comprehensive income

with a corresponding increase in the employee share based payments reserve. The fair value is measured at grant

date and amortised over the vesting periods. Vista Group has recognised $0.55m of employee expenses during

the year ended 31 December 2016 (2015: $0.2m).

The fair value of the rights granted is measured using Vista Group share price as at the grant date less the present

value of the dividends forecast to be paid prior to each vesting date. When performance rights vest, the amount

in the share based payments reserve relating to those rights are transferred to share capital. When any vested

performance rights lapse upon employee termination, the amount in the share based payments reserve relating

to those rights is transferred to retained earnings.




Set out below are summaries of performance rights granted under the plan:

GRANT DATE EXPIRY DATE

TOTAL VALUE OF GRANTED PERFORMANCE RIGHTS

PERFORMANCE RIGHTS GRANTED AT 31 DECEMBER 2016

$000’S 000’S

1 January 2015 1 April 2017 248 103

1 January 2015 1 April 2018 248 100

1 January 2016 1 April 2018 413 115

1 January 2016 1 April 2019 413 116

1,322 434

GRANT DATE

AVERAGE

EXCERCISE PRICE PER PERFORMANCE RIGHT

2016

AVERAGE EXCERCISE PRICE PER PERFORMANCE RIGHT

2015

000 000

NUMBER OF PERFORMANCE RIGHTS

NUMBER OF PERFORMANCE RIGHTS

As at 1 January $2.44 206 -

Granted during the year $3.62 231 $2.44 206

Exercised during the year - -

Forfeited during the year $3.62 (3) -

As at 31 December $3.11 434 $2.44 206

Virtual Concepts Limited (VCL) incentive scheme

Certain employees of VCL receive remuneration in the form of share based payments contingent upon achieving

certain annual milestones as part of the acquisition of VCL. The cost is recognised within acquisition expenses in

the statement of comprehensive income, refer to section 4.2 for more details of the scheme.

Expenses arising from share based payment transactions

The expense recognised for employee services received during the year is shown in the following table and are

included within operating expenses:

2016 2015

NZ$’000 NZ$’000

Expenses arising from VCL acquisition 1,564 1,435

Equity settled LTI scheme 551 208

Total expense 2,115 1,643

6.5 CAPITAL MANAGEMENT POLICIES AND PROCEDURES

Vista Group’s capital management objective is to provide an adequate return to its shareholders. This is achieved

by pricing products and services commensurately within the level of risk.

Vista Group monitors capital requirements to ensure that it meets its lending covenant obligations and to maintain

an effi cient overall fi nancing structure. At balance date Vista Group maintains low levels of debt.

The amounts managed as capital by Vista Group for the reporting periods under review are summarised as follows:

2016 2015

NZ$’000 NZ$’000

Consolidated shareholders’ funds 138,367 79,052

Consolidated assets 191,625 110,747

Capital ratio 72% 71%




7. ASSETS AND LIABILITESThis section outlines further details of Vista Group’s fi nancial performance by building on information presented

in the Statement of Financial Position.

7.1 TRADE AND OTHER RECEIVABLES

2016 2015

NZ$’000 NZ$’000

Trade receivables 45,440 23,653

Sundry receivables 19,979 2,163

Accrued revenue 987 -

Prepayments 1,573 843

Related party loan (see section 4.4) 2,621 1,500

Related party receivables – trading (see section 4.4) 2,792 1,910

Total trade and other receivables 73,392 30,069

Vista Group has recognised a loss of $5,000 (2015: $36,000) in respect of bad and doubtful trade receivables

during the year ended 31 December 2016. The loss has been included in administration expenses. The impairment

allowance included in trade receivables as at 31 December 2016 was $110,000 (2015: $160,000). Sundry receivables

include a receivable of $16.5m from WePiao related to the equity purchase of 18.3% of Vista China. See section 4.1.

Trade receivables include a receivable of $19.0m from Vista China. See section 4.4 for more detail.

Assessment of the doubtful debt provision

The assessment of providing for doubtful debts involves judgement. The collectability of trade receivables and

sundry receivables is reviewed on an on-going basis. A provision for impairment is established when there is objective

evidence that Vista Group will not be able to collect an amount due according to the original terms of the receivable.

See section 5.4 for detail.

7.2 INTANGIBLE ASSETS

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired

in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are

carried at cost less any accumulated amortisation and accumulated impairment losses.

Intangible assets with fi nite lives are amortised over the useful economic life. The amortisation period and the

amortisation method for an intangible asset with a fi nite life are reviewed at least at the end of each reporting period.

The amortisation expense on intangible assets with fi nite lives is recognised in the statement of comprehensive income

in the expense category that is consistent with the function of the intangible assets.

Development costs and internally generated software

Costs associated with maintaining computer software programmes are recognised as an expense within the statement

of comprehensive income as incurred. Development costs that are directly attributable to the design and testing of

identifi able and unique software products controlled by Vista Group are recognised as intangible assets only when all

of the following criteria are met:

• it is technically feasible to complete the software product so that it will be available for use;

• management intends to complete the software product and use or sell it;

• there is an ability to use or sell the software product;

• it can be demonstrated how the software product will generate probable future economic benefi ts;

• adequate technical, fi nancial and other resources to complete the development and to use or sell the software

product are available; and

• the expenditure attributable to the software product during its development can be reliably measured.

Other development expenditures that do not meet these criteria are recognised as an expense as incurred within

operating expenses. Development costs previously recognised as an expense are not recognised as an asset in

a subsequent period.




Intellectual property

Intellectual property has been acquired through business combination. Customer relationships include the purchase

of existing customer bases via an existing license agreement or business combination. Software licenses include the

purchase of third party software in the normal course of business. Internally generated software is recognised on

the basis described above.

Intangible assets are amortised on a straight-line basis over the following useful economic lives:

• Intellectual property 4 to 15 years;

• Customer relationships 4 to 15 years;

• Software licenses 2.5 years;

• Internally generated software 3 to 5 years based on their estimated useful life

Refer to section 7.4 for policies on goodwill measurement and impairment testing.

2016

INTERNALLY GENERATED SOFTWARE

SOFTWARE LICENSES

INTELLECTUAL PROPERTY

CUSTOMER RELATIONSHIPS TOTAL

NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000


Balance 1 January 2016 643 2,260 1,608 6,469 10,980

Additions – acquired - 64 - 1,117 1,181

Internally generated software 4,171 - - - 4,171

Acquisition through business combinations (see section 4.2)

- 38 419 - 457

Exchange differences - - (87) (311) (398)

Balance 31 December 2016 4,814 2,362 1,940 7,275 16,391

Accumulated amortisation

Balance 1 January 2016 - (523) (211) (1,094) (1,828)

Amortisation (96) (152) (624) (1,436) (2,308)

Exchange differences - - 162 372 534

Balance 31 December 2016 (96) (675) (673) (2,158) (3,602)

Carrying amount 31 December 2016 4,718 1,687 1,267 5,117 12,789

2015

INTERNALLY GENERATED SOFTWARE

SOFTWARE LICENSES

INTELLECTUAL PROPERTY

CUSTOMER RELATIONSHIPS TOTAL

NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000


Balance 1 January 2015 - 2,136 1,408 3,413 6,957

Additions – acquired - 100 - 1,929 2,029

Internally generated software 643 - - - 643

Acquisition through business combinations (see section 4.2)

- - 193 1,083 1,276

Exchange differences - 24 7 44 75

Balance 31 December 2015 643 2,260 1,608 6,469 10,980

Accumulated amortisation

Balance 1 January 2015 - (281) (63) (268) (612)

Amortisation - (242) (148) (826) (1,216)

Balance 31 December 2015 - (523) (211) (1,094) (1,828)

Carrying amount 31 December 2015 643 1,737 1,397 5,375 9,152




7.3 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset.

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the

item if it is probable that the future economic benefi ts embodied within the asset will fl ow to Vista Group and its cost

can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised

within the Statement of Comprehensive Income as incurred.

Depreciation is provided on fi xtures, fi ttings and computers. Depreciation is recognised in the profi t or loss to write

off the cost of an item of property, plant and equipment, less any residual value, over its expected useful life:

• Fixtures and fi ttings 6 to 14 years straight line

• Computer equipment 2.5 to 6 years straight line

2016

FIXTURES & FITTINGS

COMPUTER EQUIPMENT TOTAL

NZ$’000 NZ$’000 NZ$’000


Balance 1 January 2016 2,441 2,761 5,202

Divestment of Vista China assets (87) (78) (165)

Acquisition through business combinations (section 4.2) 24 97 121

Additions 1,873 955 2,828

Exchange differences (51) (70) (121)

Balance 31 December 2016 4,200 3,665 7,865

Accumulated depreciation

Balance 1 January 2016 (824) (1,998) (2,822)

Current year depreciation (474) (570) (1,044)

Divestment of Vista China assets 10 29 39

Exchange differences 33 91 124

Balance 31 December 2016 (1,255) (2,448) (3,703)

Carrying amount 31 December 2016 2,945 1,217 4,162

2015

FIXTURES & FITTINGS

COMPUTER EQUIPMENT TOTAL

NZ$’000 NZ$’000 NZ$’000


Balance 1 January 2015 1,927 2,095 4,022

Additions 453 606 1,059

Exchange differences 61 60 121

Balance 31 December 2015 2,441 2,761 5,202

Accumulated depreciation

Balance 1 January 2015 (584) (1,391) (1,975)

Current year depreciation (222) (559) (781)

Exchange differences (18) (48) (66)

Balance 31 December 2015 (824) (1,998) (2,822)

Carrying amount 31 December 2015 1,617 763 2,380




7.4 IMPAIRMENT TESTING

Impairment testing of goodwill, other intangible assets and property, plant and equipment

Goodwill and other indefi nite life intangible assets are not amortised and are tested for impairment annually

irrespective of whether there is any indication of impairment. If any such indication exists, then the asset’s

recoverable amount is estimated. After initial recognition goodwill is measured at cost less any accumulated

impairment losses.

Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying

amount may not be recoverable.

An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. Impairment

losses are recognised in the statement of comprehensive income.

The recoverable amount of an asset is the greater of its value in use and its fair value less cost to sell. For the purposes

of assessing impairment, assets are grouped at the lowest levels for which there are separately identifi able cash

infl ows which are largely independent of the cash infl ows from other assets or groups of assets (cash-generating

units). The allocation is made to those cash generating units that are expected to benefi t from the business

combination in which goodwill arose. In assessing value in use, the estimated future cash fl ows are discounted to their

present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and

the risks specifi c to the asset.


Information about estimates and judgements that have the most signifi cant effect on recognition and measurement

of goodwill and intangible assets are provided below. Actual results may be substantially different.

Goodwill and other intangible assets

The amount of goodwill initially recognised is dependent on the allocation of the purchase price to the fair value

of the identifi able assets acquired and the liabilities assumed. The determination of the fair value of the assets and

liabilities, particularly intangible assets is based, to a considerable extent, on management’s judgement. Goodwill

is subject to annual impairment testing.

Judgement is applied specifi cally to the following:

1) Assumptions in the value in use calculation for impairment testing purposes.

2) Assumptions in fair value calculation on acquisition.

Goodwill has been allocated to the following Cash Generating Units (CGU):

- Virtual Concepts Limited

- MACCS International BV

- Vista Entertainment Solutions Limited

- Powster Limited

- Share Dimension BV

- Flicks.co.nz Limited

This is the lowest level at which goodwill is monitored for internal management reporting purposes. In determining

the recoverable amount of each CGU the value in use calculation is based on post tax cash fl ows for subsequent

years which are extrapolated using estimated growth rates. Management has projected the cash fl ows for each

CGU over a fi ve-year period based on approved budgets for the fi rst year. Determination of appropriate post tax

cash fl ows and discount rates for the calculation of value in use is subjective and requires a number of assumptions

and estimates to be made, including growth in net profi t, timing and quantum of future capital expenditure, long

term growth rates and the selection of discount rates to refl ect the risks involved.

The key assumptions used for the value in use calculation are as follows:

2016 2015

NZ$’000 NZ$’000

Revenue growth average over 5 years 13% - 50% 12% - 28%

Terminal growth rate 2.5% 2.5%

CGU post-tax WACC rate – MACCS, Flicks and Vista 9.0% 12.0%

CGU post-tax WACC rate – Powster 12.0% -

CGU post-tax WACC rate – VCL and Share Dimension 16.0% 16.0%




The revenue growth average range has increased due to new acquisitions completed in 2016 which have higher

revenue growth assumptions than those tested in 2015.

Other factors considered when testing goodwill for impairment include:

• actual fi nancial performance against budgeted fi nancial performance;

• any material unfavourable operational and regulatory factors; and

• any material unfavourable economic outlook and market competition.

Impairment testing results

The calculations confi rmed that there was no impairment of goodwill during the year (2015: $Nil). The Board

believes that any reasonable possible change in the key assumptions used in the calculations for all CGU’s with the

exception of Share Dimension, would not cause the carrying amount to exceed the recoverable amount. The Share

Dimension CGU impairment assessment is sensitive to revenue growth assumptions. Should the average revenue

growth assumption decrease over the fi ve year period tested, by more than 5%, then the carrying value would

equal the recoverable amount.

7.5 TRADE AND OTHER PAYABLES

2016 2015


Trade payables 6,229 762

Sundry accruals 4,231 3,325

Deferred lease incentives 510 -

Constructive obligations - associates 4.4 50 50

Employee benefi ts 2,436 1,909

Employee benefi ts - VCL contingent consideration 4.2 1,063 591

Total trade and other payables 14,519 6,637

Included in trade and other payables is a balance of $1.28m payable to the associate company Vista China. See

section 4.4 for detail.

7.6 EMPLOYEE BENEFIT PAYABLES AND ACCRUALS

Short-term employee benefi ts

Accruals for wages, salaries, including non-monetary benefi ts, commissions and annual leave expected to be settled

within 12 months of the reporting date are recognised in respect of employees’ services up to the reporting date.

They are measured at the amounts expected to be paid using the remuneration rate expected to apply at the time

of settlement, on an undiscounted basis. Expenses for non-accumulating sick leave are recognised when the leave

is taken and are measured at the rates paid or payable.

Vista Group has pension obligations in respect of various defi ned contribution plans. Vista Group pays contributions

to publicly or privately administered pension insurance plans on a mandatory or contractual basis. Vista Group

has no further payment obligations once the contributions have been paid. The contributions are recognised as

an employee entitlement expense when they are due.

Employee benefi ts expense included in total expenses

2016 2015

NZ$’000 NZ$’000

Wages and salaries 40,324 29,679

Share-based payment expense 551 208

Defi ned contribution plans 3,716 2,815

Total employee benefi ts 44,591 32,702




8. TAX

8.1 INCOME TAX EXPENSE

Income tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profi t or loss in the

Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive

income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly

in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance

sheet date in the countries where Vista Group’s subsidiaries operate and generate taxable income. Management

periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations

are subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to

be paid to the tax authorities.

2016 2015

NZ$’000 NZ$’000

Income tax expense comprises:

Current tax expense 5,326 4,001

Deferred tax expense (Section 8.2) (1,776) (20)

Tax expense 3,550 3,981

Reconciliation of income tax expense

The relationship between the expected tax expense based on the domestic effective tax rate of the Company at 28%

(2015: 28%) and the reported tax expense in the Statement of Comprehensive Income can be reconciled as follows:

2016 2015

NZ$’000 NZ$’000

Profi t before tax 53,030 10,121

Taxable income 53,030 10,121

Domestic tax rate for Vista Group International Limited 28% 28%

Expected tax expense/(benefi t) 14,848 2,834

Foreign subsidiary company tax (358) (110)

Non-assessable income/non-deductible expenses (10,579) 1,179

Prior period adjustment (314) (103)

Deferred taxation not previously recognised 4 10

Impairment of foreign tax credits - 133

Other (51) 38

Actual tax expense/(benefi t) 3,550 3,981

As at 31 December 2016, Vista Group has $5,839,264 (2015: $3,680,502) of imputation credits available for use

in subsequent reporting periods.

8.2 DEFERRED TAX ASSETS AND LIABILITIES

Deferred income tax

Deferred income tax is provided in full, using the liability method, on temporary differences arising between tax bases

of assets and liabilities and their carrying amounts in the consolidated fi nancial statements. However, the deferred

income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than

a business combination that at the time of the transaction affects neither accounting nor taxable profi t or loss.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted




by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the

deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profi t will be available

against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates,

except where the timing of the reversal of the temporary difference is controlled by Vista Group and it is probable

that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax

assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income

taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where

there is an intention to settle the balances on a net basis.

Deferred taxes arising from temporary differences and unused tax losses can be summarised as follows:

2016

OPENING BALANCE

ACQUIRED AS PART OF A BUSINESS

COMBINATION

RECOGNISED IN INCOME

STATEMENTCLOSING

BALANCE

NZ$’000 NZ$’000 NZ$’000 NZ$’000

Trade and sundry receivables 15 - 13 28

Employee benefi ts 324 - 98 422

Property, plant and equipment (185) - (9) (194)

Other (513) - 572 59

Intangible assets (1,884) (89) 287 (1,686)

Unused tax losses 182 - 815 997

Deferred tax temporary asset/(liability) (2,061) (89) 1,776 (374)

2015

OPENING BALANCE

ACQUIRED AS PART OF A BUSINESS

COMBINATION

RECOGNISED IN INCOME

STATEMENTCLOSING

BALANCE

NZ$’000 NZ$’000 NZ$’000 NZ$’000

Trade and sundry receivables 33 - (18) 15

Employee benefi ts 160 - 164 324

Property, plant and equipment - - (185) (185)

Other (371) - (142) (513)

Intangible assets (1,553) (554) 223 (1,884)

Unused tax losses 204 - (22) 182

Deferred tax temporary asset/(liability) (1,527) (554) 20 (2,061)

The analysis of deferred tax assets and liabilities is as follows:

2016 2015

NZ$’000 NZ$’000

Deferred tax assets:

Deferred tax assets to be recovered after more than 12 months 1,105 220

Deferred tax assets to be recovered within 12 months 436 -

Deferred tax liabilities:

Deferred tax liability to be recovered after more than 12 months (1,880) (1,948)

Deferred tax liability to be recovered within 12 months (35) (333)




9. OTHER INFORMATION

9.1 EXPENSES

Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all

attached conditions will be complied with. When the grant relates to an expense item it is recognised as a deduction

against that cost on a systematic basis over the periods that the related costs, for which it is intended to compensate,

are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected

useful life of the related asset.

During the year, Vista Group recognised a total of $1.86m (2015: $2.0m) of grants from the Callaghan Innovation

and NZTE to assist with Research and Development and new market entry respectively. At balance date, there

is a 10% retention amount related to 2016 grants of $0.19m yet to be paid and subject to independent auditor

review. Government grants are recognised within the Statement of Comprehensive Income as a reduction to

administrative expenses.

Auditor’s remuneration included in administration expenses

2016 2015

NZ$’000 NZ$’000

Audit of fi nancial statements

Audit and review of fi nancial statements - PwC 239 157

Audit and review of fi nancial statements - Grant Thornton - 40

Other services

Performed by PwC:

IFRS accounting advice 10 51

Review of R&D growth grant 8 -

Advice on long-term employee incentive scheme 7 137

FRS 101 conversion accounting advice for UK subsidiary 12 -

iXBRL fi nancial statement tagging 4 -

Due diligence agreed upon procedures 19 -

Performed by Grant Thornton:

Tax advisory services - 98

Other accounting and compliance advice - 2

Total other services 60 288

Total fees paid to auditor(s) 299 485

Other expenses

2016 2015

NZ$’000 NZ$’000

Included in administration expenses:

Depreciation (Section 7.3) 1,044 781

Amortisation of intangible assets (Section 7.2) 2,308 1,216

Lease payments recognised as an operating lease expense 2,572 1,854

Vista Group has expensed $8.1m of aggregated research and development expenditure associated with software

research and development for 2016 (2015: $7.1m) within operating expenses in the Statement of Comprehensive Income.




9.2 OPERATING LEASES

Leased assets

All leases are operating leases. Leases in which a signifi cant portion of the risks and rewards of ownership are not

transferred to Vista Group as a lessee are classifi ed as an operating lease. Payments made under operating leases (net

of any incentives received from the lessor) are charged to the Statement of Comprehensive Income on a straight-line

basis over the period of the lease. Associated costs, such as maintenance and insurance, are expensed as incurred in

the Statement of Comprehensive Income.

Operating lease committments

Vista Group has operating lease commitments in respect of property and equipment. The total future minimum

payments under non-cancellable operating leases were payable as follows:

2016 2015

NZ$’000 NZ$’000

Less than one year 2,552 1,937

Between one and fi ve years 5,451 4,039

More than fi ve years - -

8,003 5,976

9.3 FINANCIAL INSTRUMENTS

Financial instruments

The classifi cation of fi nancial assets and liabilities depends on the purpose for which the fi nancial assets were

acquired. Management determines the classifi cation of Vista Group’s fi nancial assets and liabilities at initial recognition.

Vista Group’s fi nancial assets for the periods covered by these fi nancial statements consist only of loans and

receivables.

Vista Group measures all fi nancial liabilities, with the exception of contingent consideration, at amortised cost in

the periods covered by these fi nancial statements. Contingent consideration is measured at fair value. Contingent

consideration is classifi ed as equity or a fi nancial liability. Amounts classifi ed as a fi nancial liability are subsequently

remeasured to fair value with changes in the fair value recognised in the statement of comprehensive income.

(a) Loans and receivables

Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted

in an active market. They are included in current assets, except for loans and receivables with maturities greater

than 12 months after the balance sheet date. These are classifi ed as non-current assets. Vista Group’s loans and

receivables comprise ‘trade and other receivables’ in the Statement of Financial Position.

(b) Financial liabilities measured at amortised cost

Financial liabilities measured at amortised cost are non-derivative fi nancial liabilities with fi xed or determinable

payments that are not quoted in an active market. Trade and other payables, employee benefi ts, related party

loans and borrowings are classifi ed as fi nancial liabilities measured at amortised cost.

Recognition and derecognition

Financial assets are derecognised when the rights to receive cash fl ows from the fi nancial assets have expired or

have been transferred and Vista Group has transferred substantially all the risks and rewards of ownership. Financial

liabilities are derecognised if Vista Group’s obligations specifi ed in the contract expire or are discharged or cancelled.

Measurement

At initial recognition, Vista Group measures a fi nancial asset and liability at its fair value plus transaction costs that

are directly attributable to the acquisition of the fi nancial asset.

After initial recognition, loans and receivables are subsequently carried at amortised cost using the effective interest

method. After initial recognition, fi nancial liabilities are measured at amortised cost using the effective interest method.




Impairment

Vista Group assesses at the end of each reporting period whether there is objective evidence that a fi nancial

asset or group of fi nancial assets is impaired. A fi nancial asset or a group of fi nancial assets is impaired and

impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events

that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact

on the estimated future cash fl ows of the fi nancial asset or group of fi nancial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtor or group of debtors is experiencing signifi cant

fi nancial diffi culty, default or delinquency in interest or principal payments, the probability that they will enter

bankruptcy or other fi nancial reorganisation and observable data indicating that there is a measurable decrease

in the estimated future cashfl ows, such as changes in arrears or economic conditions that correlate with defaults.

For loans and receivables, the amount of the loss is measured as the difference between the asset’s carrying amount

and the present value of estimated future cash fl ows (excluding future credit losses that have not been incurred)

discounted at the fi nancial asset’s original effective interest rate. The carrying amount of the asset is reduced and

the amount of the loss is recognised in the statement of comprehensive income.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively

to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating),

the reversal of the previously recognised impairment loss is recognised in the statement of comprehensive income

Fair value of fi nancial assets and liabilities

Vista Group’s fi nancial assets and liabilities by category are summarised as follows:

Cash and short term deposits

These are short term in nature and carrying value is equivalent to their fair value.

Trade, related party and other receivables

These assets are short term in nature and are reviewed for impairment; the carrying value approximates their

fair value.

Trade, related party and other payables

These liabilities are mainly short term in nature with the carrying value approximating their fair value.

Related party loans

Fair value is estimated based on current market interest rates available for receivables of similar maturity and risk.

The interest rate is used to discount future cash fl ows.

Borrowings

Borrowings have fi xed and fl oating interest rates. Fair value is estimated using the discounted cash fl ow model

based on a current market interest rate for similar products; the carrying value approximates their fair value.

Fair values

Vista Group’s fi nancial instruments that are measured subsequent to initial recognition at fair values and are

grouped into levels based on the degree to which the fair value is observable:

Level 1 - fair value measurements derived from quoted prices in active markets for identical assets.

Level 2 - fair value measurements derived from inputs other than quoted prices included within level 1 that are

observable for the asset or liability, either directly or indirectly.

Level 3 - fair value measurements derived from valuation techniques that include inputs for the asset or liability

which are not based on observable market data.

The fair value of the contingent consideration on Ticketsoft was assessed as level 3, using a discount rate of 8% to

refl ect the time value of money. The main level 3 inputs used by Vista Group were based upon a defi ned set of metrics

related to the transition of Ticketsoft customers to Vista Cinema software. There have been no transfers between

levels or changes in the valuation methods used to determine the fair value of the Group’s fi nancial instruments during

the period. Sensitivities to reasonably possible changes in non-market observable valuation inputs would not have

a material impact on the Vista Group’s fi nancial results.




Financial instruments by category

2016 2015


Loans and receivables

Cash 5.1 15,798 16,863

Short term deposits 5.1 5,540 10,437

Trade receivables 7.1 45,440 23,653

Sundry receivables 7.1 19,979 2,163

Related party receivables - trading 4.4 2,792 3,410

89,549 56,526

Financial liabilities measured at amortised cost

Trade payables 7.5 6,229 762

Sundry accruals 7.5 4,231 2,918

Borrowings 5.3 4,848 4,792

Financial liabilities measured at fair value

Contingent consideration 4 3,122 1,253

18,430 9,725

9.4 OTHER DISCLOSURES

Contingent liabilities

There were no contingent liabilities for Vista Group at 31 December 2016 (2015: $Nil).

Capital commitments

There were no capital commitments for Vista Group at 31 December 2016 (2015: $Nil).

Events after balance date

On 17 February 2017, Vista Group announced the appointment of Mr. Cris Nicolli to its Board of Directors

as a non-executive independent director.

On 21 February 2017, the Directors approved a fully imputed fi nal dividend of 4.61 cents per share. The dividend

record date is 10 March 2017 and payment date is 24 March 2017.

There have been no other events subsequent to 31 December 2016 which materially impact on the results reported

(2015: nil).




CORPORATE

GOVERNANCE

CORPORATE GOVERNANCE

The Investor Centre section of the Company’s website

(vistagroup.co.nz.) includes copies of the following

corporate governance documents referred to in

this section:

• Constitution

• Corporate Governance Code and Appendices

(the Code), including:

- Code of Ethics

- Securities Trading Policy & Guidelines

- Shareholder Participation

- Audit & Risk Committee Charter

- Nominations & Remuneration Committee Charter

• Diversity Policy

• Continuous Disclosure Policy

• Risk and Compliance Framework Summary

The Board recognises the importance of good corporate

governance, particularly its role in delivering improved

corporate performance and protecting the interests of

all stakeholders.

The Board is responsible for establishing and

implementing the Company’s corporate governance

frameworks, and is committed to fulfi lling this role

in accordance with best practice while observing

applicable laws, the NZX Corporate Governance Best

Practice Code (NZX Code), the New Zealand Financial

Markets Authority Corporate Governance in New

Zealand – Principles and Guidelines handbook and the

Corporate Governance Principles and Recommendations

(3rd Edition) issued by the ASX Corporate Governance

Council (ASX Recommendations).

For the reporting period to 31 December 2016, the

Company believes that it has complied in all material

respects with the NZX Code.

The Company changed its listing category on the ASX

to that of an ASX Foreign Exempt Listing on 27 October

2015 and, as a result, it is exempt from complying with

the majority of the listing rules of the ASX. Instead

the Company is required to primarily comply with the

listing rules of the NZX as its home exchange, including

in relation to corporate governance. The Company

has, however continued to report its approach to

governance against the 8 fundamental principles of

the ASX Recommendations as set out in this section.

PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Companies should establish and disclose the respective roles and responsibilities of the Board and management and how their performance is monitored and evaluated.

Recommendation 1.1 – Companies should disclose

(a) the respective roles and responsibilities of the

Board and management and (b) those matters

expressly reserved to the Board and those delegated

to management.

The Board is the overall and fi nal body responsible

for all decision making within the Company, having

a core objective to effectively represent and promote

the interests of shareholders with a view to adding

long-term value to the Company.

The Code describes the Board’s role and responsibilities

and regulates internal Board procedures. The Board

has the responsibility to work to enhance the value of

the Company in the interests of the Company and the

shareholders.

The Board

The Board is responsible for directing the Company

and enhancing shareholder value in accordance with

good corporate governance principles. Further, the

Board has statutory responsibilities for the affairs and

activities of the Company, with delegation to the Chief

Executive Offi cer (the CEO) and other management

of the Company.

The main functions of the Board, the CEO and senior

executive team are set out in the Code. There is a clear

delineation between the Board’s responsibility for the

Company’s strategy and activities, and the day-to-day

management of operations conferred upon other

offi cers of the Company.

The Board reserves certain functions to itself.

These include:

• approving, and from time to time reviewing,

the Company’s corporate mission statement;

• selecting and (if necessary) replacing the CEO;

• ensuring that the Company has adequate

management to achieve its objectives and to

support the CEO so that a satisfactory plan for

management succession is in place;

• reviewing and approving the strategic, business and

fi nancial plans prepared by management;

• reviewing and approving certain material

transactions, and making certain investment and

divestment decisions;

• approving and overseeing the administration of

the Company’s technology development strategy;


• monitoring the Company’s performance against its

approved strategic, business and fi nancial plans and

overseeing the Company’s operating results;

• ensuring ethical behaviour by the Company, the

Board and management, including compliance with

the Company’s constitution, the relevant laws, listing

rules and regulations and the relevant auditing and

accounting principles;

• implementing and from time to time reviewing the

Company’s Code of Ethics, to foster high standards

of ethical conduct and personal behaviour and hold

accountable those Directors, managers or other

employees who engage in unethical behaviours;

• ensuring the quality and independence of the

Company’s external audit process; and

• assessing from time to time its own effectiveness

in carrying out these functions and the other

responsibilities of the Board.

Indemnities and insurance

In accordance with Section 162 of the Companies Act

1993 and the Company’s Constitution, the Company

indemnifi es the Directors in relation to potential liabilities

and costs they may incur for acts or omissions in their

capacity as Directors. The Directors’ and Offi cers’

Liability insurance covers risks normally covered by such

policies arising out of acts or omissions of Directors

and employees in their capacity as such. In addition,

the Company acquired prospectus insurance for its initial

public offering. Details are recorded in the interests

register as required by the Companies Act 1993.

Board meetings

In the period from 1 January 2016 until 31 December

2016 the Board has met formally 9 times. At each

scheduled meeting the Board considers key fi nancial

and operational information as well as matters of

strategic importance. Directors who are not members

of the Committees may attend the Committee meetings.

Company subsidiaries

The Company has three wholly owned subsidiaries,

Vista Entertainment Solutions Limited (“VESL”), Virtual

Concepts Limited (“VCL”) and Flicks.co.nz Limited

(“Flicks”). VESL has four wholly owned subsidiaries

consisting of Vista Entertainment Solutions (USA)

Inc., Vista Entertainment Solutions (UK) Limited, Vista

International Entertainment Solutions South Africa

(Pty) Limited and Vista Entertainment Solutions

(Canada) Limited. VCL has two wholly owned

subsidiaries consisting of Movio Ltd and Movio

Inc. Board meetings were held for each of these

subsidiaries during the year ended 31 December 2016,

with material matters raised in these meetings reported

to the Company’s Board, as appropriate.

Delegation

To enhance effi ciency, the Board has delegated some

of its powers to Board Committees and other powers

to the CEO. The CEO’s employment contract is not

for a specifi c term. The day-to-day leadership and

management of the Company is undertaken by the

CEO and senior management.

The CEO is responsible for:

• formulating the vision for the Company;

• recommending policy and the strategic direction

of the Company for approval by the Board;

• providing management of the day to day operations

of the Company; and

• acting as the spokesperson of the Company.

The terms of the delegation by the Board to the CEO

are documented in the Code and more clearly set out

in the Company’s Delegated Authority Manual. This

manual also establishes the authority levels for decision-

making within the Company’s management team.

The CEO has also formally delegated decision making to

senior management within their areas of responsibility

and subject to quantitative limits to ensure consistent

and effi cient decision making across the Company.

Board Committees

The Board has established and adopted Charters for

two Committees: the Audit and Risk Committee and

the Nominations and Remuneration Committee.

The membership of each Committee at 31 December

2016 was:

• Audit and Risk – Susan Peterson (Chair), Kirk Senior

and James Ogden

• Nominations and Remuneration Committee – James

Ogden (Chair), Susan Peterson and Kirk Senior

Other Committees may be established from time to time.

The Nominations and Remuneration Committee held

two formal meetings during the fi nancial year ended

31 December 2016 with other matters, particularly

the approval of grants under the Long Term Incentive

scheme for employees dealt with by the full Board in

this period. The Audit and Risk Committee met 6 times

during the year. The auditors, PricewaterhouseCoopers,

attended the meetings. The meetings of both

committees were attended by all members.

Recommendation 1.2 – Companies should undertake

appropriate checks before appointing a person, or

putting forward to security holders a candidate for

election as a director and provide security holders with

all material information in its possession relevant to a

decision on whether or not to elect or re-elect a director.


Nomination and appointment

The procedures for the appointment and removal of

Directors are ultimately governed by the Company’s

Constitution. The Company has established a Nominations

and Remuneration Committee governed by the

Nomination and Remuneration Committee Charter,

a copy of which is available on the Company’s

website. The primary objectives of the Nominations

and Remuneration Committee are to ensure that a

formal and transparent method for the nomination

and appointment of Directors exists; to recommend

Director appointments to the Board; and to regularly

review the composition of the Board to ensure the

right composition of Directors is maintained.

The Nominations and Remuneration Committee does

this by:

• making recommendations to the Board as to its size;

• reviewing the composition of the Board to ensure

the most appropriate balance of skills, qualifi cations

and experience;

• reviewing Board succession plans to maintain

an appropriate balance of skills, experience and

expertise on the Board;

• reviewing criteria for determining suitability of

potential Directors in terms of balance of the Board;

• identifying and maintaining a list of suitably qualifi ed

people who could be approached for future Board

positions;

• ensuring there is an appropriate induction

programme in place for all new Directors; and

• making recommendations to the Board about the

appointment and re-election of Directors.

When recommending to the Board suitable candidates

for appointment as Directors, the Committee will

consider, among other things:

• the candidate’s experience as a Director;

• their skills, expertise and competencies; and

• the extent to which those skills complement

the skills of existing Directors.

Retirement and re-election

The Board acknowledges and observes the relevant

Director rotation/retirement rules under the NZX

Main Board Listing Rules.

Two Directors (Kirk Senior and Susan Peterson)

retired by rotation and were re-elected at the

Annual Shareholders Meeting in May 2016.

Changes post 31 December 2016

During the 2016 year Kirk Senior increased his time

commitment in the role of Executive Chair and as

result the Board has undertaken the following steps:

• recommended the addition of a further non-

executive independent Director. The process to

appoint a new Director commenced in late 2016

under the nomination and appointment process

for new Directors. As a result of this process

Cris Nicolli was appointed as an independent

non-executive director on 17 February 2017;

• Kirk Senior relinquished his role as Chair and as

a member of the Nominations and Remuneration

Committee. James Ogden was appointed as Chair

and Cris Nicolli as a member. The current members

of the Nominations and Remuneration Committee

are now James Ogden (Chair), Susan Peterson,

and from his appointment on 17 February 2017,

Cris Nicolli. The members of this Committee,

including the Chair, are independent Directors.

Recommendation 1.3 – Companies should have

a written agreement with each Director and senior

executive setting out the terms of their appointment.

New Directors are required to consent to act as a

Director and receive a formal letter of appointment

which sets out duties and responsibilities, rights and

remuneration entitlements.

Each senior executive is employed under an individual

employment agreement which sets out the terms

on which the senior executive is employed including

details of the executive’s duties and responsibilities,

rights and remuneration entitlements. The employment

agreement also sets out the circumstances in which

employment may be terminated by either the

Company or the executive.

Recommendation 1.4 – The company secretary should be

accountable directly to the Board, through the chair, on all

matters to do with the proper functioning of the Board.

The Company is not required to have and has not

appointed a company secretary. One of the two internal

legal counsel acts as Board Minute Secretary.

Recommendation 1.5 – Companies should have a policy

concerning diversity and disclose that policy together

with measurable objectives for achieving gender diversity

and its progress towards achieving those objectives.

Diversity Policy

Vista values and respects the contributions, ideas and

experiences of people from all backgrounds and is

proud to have a diverse company with staff from all

around the world. The Company has a formal Diversity

Policy, a copy of which is available on the Company’s

website. The Diversity Policy sets out the Company’s

commitment to achieving diversity in the attributes

and experiences of the Board, management and staff

across a broad range of criteria including gender,

background, and education (amongst others).


The Company set an objective for the 2016 fi nancial

year to review our recruitment policy for any bias.

In compliance with the Diversity Policy the Board

has reviewed the Company’s performance against

that objective.

PROGRESS MADE: Our multi-stage recruitment

process (most hires involve 3 separate interviews

including a panel) and use of psychometric testing

provides us with confi dence that we are providing a

platform that ensures that gender or other bias is not

present in hiring decisions. While the recruitment of

female staff continues to be diffi cult in the technology

sector due to the lack of qualifi ed candidates, we have

had signifi cant success in 2016 recruiting from a wide

geographic and ethnic pool.

The objectives for the 2017 fi nancial year are to:

(a) continue to strive to ensure strong female

candidates are identifi ed in the recruitment

process for all board and senior executive roles;

(b) review and encourage participation of

underrepresented groups in our leadership

training programmes;

(c) complete a review of our gender pay equality.

For the Company in total the percentage of females

remained consistent with 2016 despite a signifi cant

increase in total headcount through both growth

and business acquisition.

Gender Diversity Statistics


MALE FEMALE

TOTALNO. % NO. %

Board 4 80.0% 1 20.0% 5

Senior Executive* 8 100.0% 0 0.0% 8

Total Company 396 74.4% 136 25.6% 532


MALE FEMALE

TOTALNO. % NO. %

Board 4 80.0% 1 20.0% 5

Senior Executive* 5 100.0% 0 0.0% 5

Total Company 280 75.7% 90 24.3% 370

* For the purposes of this annual report “Senior Executive” means the senior executive team constituted in accordance with the Code, and who report directly to the CEO. The senior executive team are “offi cers” for the purposes of the NZX Main Board Listing Rules.

Recommendation 1.6 – Companies should have and

disclose the process for evaluating the performance

of the Board, its committees and individual directors

and disclose, in relation to each reporting period,

whether a performance evaluation was undertaken in

the reporting period in accordance with that process.

Performance evaluation of the Board, its Committees and individual Directors

The Chair of the Board must ensure that rigorous,

formal processes for evaluating the performance of

the Board, Board Committees and individual Directors

are in place and the Chair must lead such processes.

Further, as part of that evaluation process the Board

must establish performance criteria for itself and review

its performance against those criteria (at least) annually.

The Board must also review its relationship with

management annually. As part of the review process, the

Board will use, evaluate, and where necessary action, the

results of a board performance questionnaire. Further,

the Committee undertakes an annual self-review of

its objectives and responsibilities. In addition, those

objectives and responsibilities are also reviewed (as

against the Nominations and Remuneration Committee

Charter) by the Board and CEO.

A review was undertaken during September 2016

and the results reported to the Board at the October

meeting. Recommendations from the results of the

review have been considered and will be implemented

by the Board.


disclose a process for periodically evaluating the

performance of its senior executives and disclose,

in relation to each reporting period, whether

a performance evaluation was undertaken in

accordance with that process.

Performance evaluation of senior executives

The Board is responsible for constantly monitoring

the performance of the CEO against the Board’s

requirements.

The Nominations and Remuneration Committee

is responsible for evaluating the performance of

the CEO and oversees the CEO’s evaluation of

senior management that report directly to the CEO.

The functions of the Committee are set out in the

Nominations & Remuneration Committee Charter, a

copy of which is available on the Company’s website.

For the fi nancial year ended 31 December 2016,

the performance evaluation of the CEO and senior

management is based on criteria set by the Nominations

and Remuneration Committee which includes the

performance of the business, the accomplishment

of long-term strategic objectives and other non-

quantitative objectives agreed at the beginning of

each fi nancial year. Performance evaluations of the

CEO and senior management team will be completed

in accordance with the process established by the

Company’s Nominations and Remuneration Committee

and the terms of the Code (as applicable).


PRINCIPLE 2 – STRUCTURE THE BOARD TO ADD VALUE

Companies should have a Board of an appropriate size, composition, skills and commitment to adequately discharge its duties effectively.

Composition of the Board

At 31 December 2016, the Board comprised fi ve

Directors, as follows:

– Kirk Senior

– James Ogden

– Susan Peterson

– Murray Holdaway

– Brian Cadzow

The Board has a broad range of IT, fi lm industry,

fi nancial, sales, business and other skills and expertise

necessary to meet its objectives. There has been some

change to the roles of the Board members in 2016, as

a result, Kirk Senior is now executive Chairman, and

James Ogden and Susan Peterson are non-executive

independent Directors. The Company’s Constitution

currently requires a minimum of three Directors and

a maximum of eight.

With the change of Kirk Senior to an Executive role

the Board commenced a process to recruit a new

independent non-executive Director who could add

to the skills matrix of the existing members and ensure

at least an equal number of independent non-executive

to executive Directors. As a result of this process

Cris Nicolli was appointed as an independent non-

executive director on 17 February 2017.

Recommendation 2.1 – The Board should have an

appropriately structured nomination committee.

The Company has established a Nominations and

Remuneration Committee governed by the Nomination

and Remuneration Committee Charter, a copy of

which is available on the Company’s website. Further

information as to the primary objectives, processes

and composition of the Nomination and Remuneration

Committee are contained on pages 67 and 68 in

relation to Recommendation 1.2.


disclose a board skills matrix setting out the mix of

skills and diversity that the Board currently has or

is looking to achieve in its membership.

In determining the composition of the Board, the

Nominations and Remuneration Committee ensures

that the Board has an optimal size and mix of skills

to facilitate effi cient and appropriate decision making.

With the decision of the Board to recruit a new

independent non-executive Director the Board has

considered the skills of the existing Directors to ensure

that the skills of the new director will complement

and add to the effectiveness of decision making.

The existing Board is satisfi ed that it has had, and

with the addition of Cris Nicolli as a new independent

non-executive Director will continue to have, the

appropriate mix of skills and diversity for strategic

decision-making and effective oversight in relation

to the Company’s affairs as at the date of this report.

The skills and experience of each Director are set out

on page 76 in the ‘Disclosures’ section.

Recommendation 2.3 – Companies should disclose

whether its directors are independent.

Director independence

The Board Charter requires that a minimum of two

Directors be “independent”. The Board takes into

account the guidance provided under the NZX Main

Board Listing Rules and the ASX Recommendations,

in determining the independence of Directors. Under

those rules and recommendations, Directors are

considered to be independent if they are non-executive

and do not have an interest or relationship that could

or could be perceived to unreasonably infl uence their

decisions relating to the Company or interfere with

their ability to act in the Company’s best interests.

The Board will review any determination it makes

as to a Director’s independence on becoming aware

of any information that may have an impact on the

independence of the Director. For this purpose,

Directors are required to ensure that they immediately

advise the Board of any relevant new or changed

relationships to enable the Board to consider and

determine the materiality of the relationships.

As at 31 December 2016, the Board considered

that James Ogden and Susan Peterson are

Independent Directors. As at 31 December 2016,

the Board has determined that Murray Holdaway

and Brian Cadzow are not Independent Directors

because of their executive responsibilities and

respective substantial shareholdings. Kirk Senior

has increased his commitment level to the

Company and is now considered to have executive

responsibilities, in addition to his role as Chairman,

and therefore the Board does not consider that

he is an Independent Director.

On 17 February 2017, Cris Nicolli was appointed to

the Board. The Board considers that Cris Nicolli is

an Independent Director.


Length of Service of Directors

DIRECTOR APPOINTEDLENGTH OF SERVICE

TO 31 DEC 2016

Murray Holdaway 6 August 2003 13 years, 5 months

Brian Cadzow 6 August 2003 13 years, 5 months

Kirk Senior 3 June 2014 2 years, 7 months

Susan Peterson 3 June 2014 2 years, 7 months

James Ogden 3 June 2014 2 years, 7 months

Cris Nicolli 17 February 2017 n/a

Confl icts of interest

The Code outlines the Board’s policy on confl icts of

interest. Where confl icts of interest do exist, Directors

excuse themselves from discussions and do not exercise

their right to vote in respect of such matters.

Recommendation 2.4 – A majority of the Board should

be independent directors.

Whilst, the Board does not comply with the ASX

Recommendation that a majority of the Board should

be independent Directors, the Board considers that

it has an appropriate mix of skills, experience and

independence to ensure the Company is governed

in a manner that ensures that the interests of all

shareholders are represented and protected. The

change in role for Kirk Senior resulted in the Board

commencing a process to recruit a new independent

Director to establish a position of an equal number of

executive and independent Directors. As a result of this

process Cris Nicolli was appointed as an independent

non-executive director on 17 February 2017. The Board

is also confi dent that proper processes are in place to

address the needs and expectations of stakeholders

with respect to independence in decision-making and

the management of any confl icts of interest.

Recommendation 2.5 – The Chairman should be an

independent director and, in particular, should not

be the same person as the CEO.

The ASX Recommendations require that the Chairman

should be an independent Director. Whilst, Mr Senior

is not considered an independent Director, he is

considered to be the most appropriate Director to act

as Chairman because of the depth of his leadership and

operational experience and considerable professional

network across the international fi lm industry. The Board

is confi dent that Mr Senior is capable of exercising

independent views and judgement in exercising his

role as Chairman.

The Chairman of the Board is elected by the Directors.

The Board supports the separation of the role of

Chairman (Kirk Senior) and CEO (Murray Holdaway)

in accordance with the requirements of the NZX Code

and the ASX Recommendations. The Chairman’s role is

set out in the Code and includes to manage the Board

effectively, to provide leadership to the Board, and to

facilitate the Board’s interface with the CEO.

Recommendation 2.6 – Companies should have

a program for inducting new directors and provide

appropriate professional development opportunities

for directors to develop and maintain the skills

and knowledge needed to perform their role

as directors effectively.

All Directors are responsible for ensuring they remain

current in understanding their duties as Directors.

To ensure ongoing education, Directors are regularly

informed of developments that affect the Company’s

industry and business environment, as well as company

and legal issues that impact the Directors themselves.

Directors have access to management and any additional

information they consider necessary for informed

decision making.

Board access to information and advice

The Director – Commercial and Legal in conjunction

with the Chief Financial Offi cer is responsible for

supporting the effectiveness of the Board by ensuring

that policies and procedures are followed and co-

ordinating the completion and dispatch of the Board

agendas and papers. All Directors have access to the

senior management team, including the Director –

Commercial and Legal and the Chief Financial Offi cer,

to discuss issues or obtain information on specifi c

areas in relation to items to be considered at Board

meetings or other areas as they consider appropriate.

Further, Directors have unrestricted access to Group

records and information.

The Board, the Board Committees and each Director

have the right, subject to the approval of the Chairman,

to seek independent professional advice at the

Company’s expense to assist them to carry out their

responsibilities as a Director or Committee member.

Further, the Board and Board Committee members have

the authority to secure the attendance at meetings of

external parties with relevant experience and expertise.

PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY

Companies should act ethically and responsibly.

Recommendation 3.1 – Companies should have a code

of conduct for its directors, senior executives and

employees and disclose that code or a summary of it.

The Board maintains high standards of ethical conduct

and the CEO is responsible for ensuring that high

standards of conduct are maintained by all staff.


Code of Ethics

The Company has adopted a Code of Ethics which

plays a key role in establishing the framework by which

the Company’s employees are expected to conduct

themselves. A copy of the Code of Ethics is available

on the Company’s website. The Code of Ethics is

intended to facilitate decisions that are consistent with

the Company’s values, business goals and legal and

policy obligations. The Code of Ethics covers, among

other things, confl icts of interest, gifts and behaviours.

The Code of Ethics will guide the Company and

its employees to:

• the practices necessary to maintain confi dence

in the Company’s integrity;

• the practices necessary to take into account the

Company’s legal obligations and the reasonable

expectations of their stakeholders; and

• the responsibility and accountability of individuals

for reporting and investigating reports of unethical

practices.

Any person who becomes aware of a breach or

suspected breach of the Code of Ethics is required to

report it immediately in accordance with the policy.

PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPORTING

Companies should have formal and rigorous processes that independently verify and safeguard the integrity of their corporate reporting.

Recommendation 4.1 – The Board should establish

an appropriately structured audit committee.

Audit and Risk Committee

The Board has an Audit and Risk Committee whose

primary objective is to assist the Board in fulfi lling

its responsibilities by:

• ensuring the quality and independence of the

Company’s external audit process;

• overseeing (among other things):

- the integrity of external fi nancial reporting,

- application of accounting policies,

- fi nancial management, and

- the risk management framework and monitoring

compliance with that framework;

• providing a formal forum for communication

between the Board and senior fi nancial

management;

• regularly reviewing the Company’s internal controls

and systems;

• undertaking an annual self-review of the

Committee’s objectives;

• regularly reporting to the Board on the operation of

the Company’s risk management and internal control

processes; and

• provide suffi cient information to the Board to allow

the Board to report annually to shareholders and

stakeholders on risk identifi cation and management

procedures and relevant internal controls of the

Company.

The current members of the Audit and Risk Committee

are Susan Peterson (Chair), Kirk Senior, James Ogden

and from his appointment on 17 February 2017, Cris

Nicolli. A majority of the Committee members are

non-executive and independent Directors. The Audit

and Risk Committee is chaired by Susan Peterson who

is an independent Director and not Chair of the Board.

Directors who are not members of the Audit and Risk

Committee and employees of the Company will only

attend Audit and Risk Committee meetings at the

invitation of the Committee.

A copy of the Audit and Risk Committee Charter

is available on the Company’s website.

Recommendation 4.2 – CEO and CFO certifi cation

of fi nancial statements.

The provisions of Chapter 2M of the Corporations

Act do not apply to the Company. Accordingly, the

Company will not seek or obtain the assurance from

management ordinarily required by section 295A

of the Corporations Act and will not be complying

with Recommendation 4.2 (or any other related

recommendations) on an ongoing basis.

Recommendation 4.3 – External auditor’s attendance

and availability at the AGM.

The external auditor attends the AGM. Shareholders

are given a reasonable opportunity at the meeting to

ask the auditor questions relevant to the conduct of

the audit, the audit report, the Company’s accounting

policies and the independence of the auditor.

PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE

Companies should make timely and balanced disclosure of all matters concerning the company that a reasonable person would expect to have a material effect on the price or value of its securities.

Recommendation 5.1 – The Company should have

a written policy for complying with its continuous

disclosure obligations and disclose that policy or

a summary of it.

The Company is subject to the disclosure requirements

of securities and other laws in New Zealand and

Australia and is required to comply with the NZX


Main Board Listing Rules. The Company changed

its ASX listing category from a Standard Listing to

an ASX Foreign Exempt Listing effective from the

commencement of trading on 27 October 2015. As an

ASX Foreign Exempt Listing, the Company is required

to immediately provide ASX with all of the information

that it provides to NZX that is, or is to be, made public.

The Company is committed to notifying the market

through full and fair disclosure to the NZX Main

Board and ASX of any material information related

to its business that is required to be disclosed by

the NZX Main Board Listing Rules. The Company is

mindful of the need to keep stakeholders informed

through a timely, clear and balanced approach which

communicates both positive and negative news. These

notifi cations are available on the Company’s website.

The Company is also required to comply with the periodic

disclosure requirements under the NZX Main Board

Listing Rules.

The Company has adopted a Continuous Disclosure

Policy which establishes procedures that are aimed

at ensuring that the Directors and all employees of

the Company are aware of and fulfi l their disclosure

obligations under the NZX Main Board Listing Rules.

A copy of the Company’s Continuous Disclosure Policy

is available on the Company’s website.

The Continuous Disclosure Policy creates a Disclosure

Committee which will determine whether information

is material and whether it should be released.

The Disclosure Committee is made up of the Board

Chair, Audit and Risk Committee Chair and one

other independent Director. The Policy has been

communicated internally to ensure that it is strictly

adhered to by the Board and the Company’s employees.

PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS

Companies should respect the rights of its shareholders by providing them with appropriate information and facilities to allow them to exercise those rights effectively.

Recommendation 6.1 – The Company should provide

information about itself and its governance to

shareholders on its website.

A copy of the Code is available on the Company’s

website. The Company’s website, www.vistagroup.

co.nz, provides information to shareholders and

investors about the Company. The website includes

copies of past annual reports, results announcements,

media releases and general company information.

Recommendation 6.2 – The Company should design

and implement an investor relations program to facilitate

effective two-way communication with investors.

Although the Company does not have a formal

shareholder communications policy, it does take

appropriate steps to keep shareholders informed

about its activities and to listen to issues or concerns

raised by shareholders.

Fundamental to the Company’s provision of information

to shareholders is the management of its continuous

disclosure obligations which facilitates all shareholders

having access to important company information.

In addition to lodging this information with the NZX

and the ASX, the Company uses its website to make

available to shareholders information about the

Company and its activities.

Recommendation 6.3 – The Company should disclose

the policies and processes it has in place to facilitate and

encourage participation at meetings of shareholders.

The Code addresses Shareholder Participation.

This section of the Code is designed to highlight the

Board’s accountability to shareholders. Further, this

section encourages shareholders to use the annual

general meeting to ask questions and make comments

on the performance of the Company. This section of

the Code highlights that the Board welcomes input

from shareholders and encourages shareholders to

submit questions in writing prior to the annual general

meeting so that an informed answer can be given

at that meeting, and also indicates that the Board

will ensure that the Company’s external auditors

are available for questioning by shareholders at

the annual general meeting.

Recommendation 6.4 – The Company should give

shareholders the option to receive communications

from, and send communications to, the Company

and its security registry electronically

Shareholders have the option of electing to receive

all shareholder communications, including dividend

statements, by e-mail. The Company provides a printed

copy of the Annual Report to only those shareholders

who have specifi cally elected to receive a printed copy.

Other shareholders are advised that the Annual Report

is available on the Company’s website in accordance

with the requirements of the NZ Companies Act 1993.

All announcements made to the NZX and the ASX are

available to shareholders by email notifi cation when

a shareholder provides the Company’s Share Registry

with an email address and elects to be notifi ed of all

such announcements.

The Company’s Share Register is managed and

maintained by Link Market Services Limited. Shareholders

can access their shareholding details or make enquiries

about their current shareholding electronically.


PRINCIPLE 7 – RECOGNISE AND MANAGE RISK

Companies should establish a sound risk management framework and periodically review the effectiveness of that framework.

Recommendation 7.1 – The Company should establish

an appropriately structured risk management committee

for the oversight of material business risks.

The identifi cation and effective management of the

Company’s risks are a priority of the Board. The CEO

is accountable for all operational and compliance risk

across all of the Company’s operations and businesses.

The Director – Commercial and Legal has management

accountability for the effective implementation of the

Risk Framework (as defi ned below) across all of the

Company’s businesses.

The Company has in place an overarching Operating Risk

and Compliance Framework (the “Risk Framework”),

supported by operating risk and compliance policies

that aim to ensure that Vista Group, its Directors

and employees will comply with relevant regulatory

requirements such as New Zealand laws, NZX Main Board

Listing Rules, ASX listing rules applicable to an ASX

Foreign Exempt Listing and relevant codes of practice.

The purpose of the Risk Framework is to ensure a

consistent approach to operating and compliance risk

across all the Company’s businesses in all geographies

where the Company operates. The Risk Framework sets

out the specifi c areas for which the CEO and Director –

Commercial and Legal are accountable.

As discussed above, the Board has established an

Audit and Risk Committee whose primary objective

is to assist the Board in fulfi lling its responsibilities

by, amongst other things:

• overseeing (among other things) the risk management

framework and monitoring compliance with that

framework;

• providing a formal forum for communication between

the Board and senior fi nancial management;

• regularly reviewing the Company’s internal controls

and systems;

• undertaking an annual self-review of the

Committee’s objectives;

• regularly reporting to the Board on the operation of

the Company’s risk management and internal control

processes; and

• providing suffi cient information to the Board to

allow the Board to report annually to shareholders

and stakeholders on risk identifi cation and

management procedures and relevant internal

controls of the Company.

Recommendation 7.2 – The Board or a committee

of the Board should review the Company’s risk

framework at least annually to satisfy itself that

it continues to be sound.

In addition to the Risk Framework, the Code provides

that the Audit and Risk Committee will regularly report

to the Board on the operation of the Company’s risk

management and internal control processes and

provide suffi cient information to the Board to allow

the Board to report annually to shareholders and

stakeholders on risk identifi cation and management

procedures and relevant internal controls of the

Company. During the fi nancial year ended 31 December

2016, the Board received and considered a report on

the Company’s management of material security risks.

In addition, the Company’s senior management reports

at each meeting on the established Risk Register for

the Company.


the structure and role of its internal audit function.

While the Company does not have an internal audit

function, the Company fosters a culture of excellence

in all areas of risk management and takes all operating

and compliance risk obligations seriously.

The Chief Executive is accountable for all operational

and compliance risks across all of the Company’s

operations and businesses. The Chief Financial Offi cer

has management accountability for the effective

implementation of the Risk Framework across all

of the Company’s businesses.

All individual employees of the Company are

accountable for their personal compliance with the

Risk Framework and supporting policies. At the time

of employment, all new staff are required to confi rm

that they have read and are aware of the Company’s

policies. On an annual basis, all staff are required to

re-confi rm awareness of and adherence to policies.


whether it has any material exposure to economic,

environmental and social sustainability risks and, if it

does, how it manages or intends to manage those risks.

The Board considers that a number of risks across

various risk categories have the potential to impact on

the economic, environmental and social sustainability

of the Company in one way or another. Details of these

types of risks and the way in which they are managed are

set out in the Company’s prospectus at pages 44 to 48,

a copy of which is available on the Company’s website.


PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY

Companies should pay director remuneration suffi cient to attract and retain high quality directors and design its executive remuneration to attract, retain and motivate high quality senior executives and to align their interests with the creation of value for security holders.

Recommendation 8.1 – The Board should establish an

appropriately structured remuneration committee.

Nominations and Remuneration Committee

The Company has established a Nominations and

Remuneration Committee, which is governed by the

Nominations and Remuneration Committee Charter.

In addition to the objectives mentioned above, further

primary objectives of the Committee are to ensure that

a formal and transparent method to recommend Director

remuneration packages exists and to assist the Board in

the establishment of remuneration policies and practices,

including setting and reviewing the CEO’s remuneration

and that of other senior executives and Directors (both

non-executive and executive) The Committee is also

required to regularly review and recommend changes

to Director remuneration to ensure that it is at an

appropriate level and effectively managed.

As stated above, the Nominations and Remuneration

Committee had three members at 31 December 2016,

consisting of a majority of independent Directors

and, is now chaired by an independent director. With

the appointment of Cris Nicolli to the Board and the

Nominations and Remuneration Committee with

effect from 17 February 2017, the Committee will have

3 members all of whom are independent Directors.

Recommendation 8.2 – The Company should

separately disclose its policies and practices regarding

the remuneration of non-executive directors and

the remuneration of executive directors and other

senior executives.

Director remuneration

Directors’ fees are currently set at a maximum of

$500,000 per annum for the non-executive Directors.

The actual amount of fees paid in the past year was

$236,000.

Full disclosure of Directors’ remuneration is set out

at page 78.

The Chairman is now remunerated through the

executive remuneration structure. The independent

Directors receive $80,000 per annum each. This was

increased from $75,000 effective 1 May 2016. The

CEO and other executive Directors, including the

Chairman receive remuneration from the Company

and its subsidiaries (the Vista Group) and do not

receive Directors’ fees. Shareholders have approved

the Directors’ fees in aggregate for all Directors at

$500,000 per annum. This fee pool includes headroom

for the appointment of Cris Nicolli as an additional

independent Director through the Board appointment

process. Directors are also entitled to be paid for

reasonable travel, accommodation and other expenses

incurred by them in connection with their attendance

at Board or shareholder meetings, or otherwise in

connection with the Vista Group’s business.

Following the adoption of a long term incentive

plan in 2015, Executive and senior management

remuneration currently comprises three components:

fi xed remuneration, short term performance incentives

and a long term incentive plan. This is to ensure

appropriate weighting of incentives between short

and longer-term performance and to align executive

packages with longer-term shareholder value.

Fixed remuneration

Fixed remuneration consists of base salary and benefi ts.

Short term performance incentives

The short term performance incentive will be an

annual risk performance bonus which is either a specifi c

percentage of each executive’s base salary or a set

value. The executives’ and senior managers’ right to

short term performance incentives will be conditional

on the performance of the individual and the company

and will be assessed annually by the Board.

Executive Long-Term incentive plan

The Vista Group established a long term incentive plan

(the LTI Plan) for executives, senior managers and staff

in 2015. The LTI Plan aims to align executives’, senior

managers’ and staff interests with those of shareholders,

by providing a proportion of remuneration on an

“at-risk” basis aligned to the achievement of defi ned

performance targets. Grants have been made in 2015

with a commencement date of 1 January 2015 and in

2016 with a commencement date of 1 January 2016.

The fi rst vesting date under the 2015 grants is due on

1 April 2017 .

Recommendation 8.3 – If the Company has an equity-

based remuneration scheme, it should have a policy

on whether participants are permitted to enter into

transactions (whether through the use of derivatives

or otherwise) which limit the economic risk of

participating in the scheme and disclose that policy

or a summary of it.

All Directors and employees are required to comply

with the Company’s Securities Trading Policy and

Guidelines in undertaking any trading in the Company’s

shares. The table of Directors’ shareholdings is included

in the Disclosures section of this Annual Report.


DIRECTORS

The names of the Company’s directors in offi ce during the fi nancial year and until the date of this report are as follows.

Directors were in offi ce for this entire period unless otherwise stated.

K Senior, BCom, CA (Executive Chairman), re-elected May 2016

M Holdaway, BSc, BCom (Executive Director)

B Cadzow, BCom, (Executive Director)

S Peterson, BCom, LLB (Independent Director), re-elected May 2016

J Ogden, BCA Hons, FCA, CFInstD (Independent Director)

Directors appointed post 31 December 2016

C Nicolli, BMBS, FAICD, appointed 17 February 2017

STOCK EXCHANGE LISTINGS

The Company’s ordinary shares are listed and quoted on the NZX and on the ASX.

On 27 October 2015, the Company changed its listing category on the ASX to that of an ASX Foreign Exempt Listing.

ENTRIES RECORDED IN THE INTERESTS REGISTER

The Company maintains an Interests Register in accordance with the Companies Act 1993 and the Financial

Markets Conduct Act 2013. The following are particulars of entries made in the Interests Register for the period

1 January 2016 to 31 December 2016.

Directors’ interests, Directors’ disclosed interests, or cessations of interest, in the following entities pursuant

to section 140 of the Companies Act 1993 during the year ended 31 December 2016 are marked*.

NAME OF DIRECTOR ENTITY NATURE OF GENERAL DISCLOSURE

Murray Holdaway Invista Share Nominee Limited Director and shareholder

Holdaway and Geary Trust Trustee

Brian Cadzow B&J Associates Consulting Limited Director and shareholder

Invista Share Nominee Limited Director and shareholder

B&J Cadzow Family Trust Trustee

A J Cadzow Trust* Trustee

K A Cadzow Trust* Trustee

Waiotahi Trust* Trustee

Grandma’s Trust* Trustee

Johnson Trust Trustee

Titirangi Golf Club Inc. Board member

Kirk Senior Kirk Senior Pty Limited Director and shareholder

Senior Family Super Fund Pty Limited Director and shareholder

Kirk Senior Family Trust Trustee

James Ogden The Warehouse Group Limited and group companies Director

The Warehouse Group Financial Services Limited* Director

Summerset Group Holdings Limited Director

Tegel Group Holdings Limited* Chair

DISCLOSURES


NAME OF DIRECTOR ENTITY NATURE OF GENERAL DISCLOSURE

James Ogden (continued)

Pencarrow Private Equity Fund Independent Member of the

Investment Committee

Pencarrow Bridge Fund GP Limited (General Partnership)* Director

Crown Forest Rental Trust Member of the Audit and Risk

Committee

NZ Markets Disciplinary Tribunal Member

Alliance Group Limited Director

Petone Investments Limited Director and shareholder

Ogden Consulting Limited Director and shareholder

Susan Peterson The New Zealand Merino Company Limited Director and Chairman of Audit

and Risk Committee

NZ Markets Disciplinary Tribunal Member

Peterson Mellsop Family Trust Trustee and benefi ciary

Trustpower Limited Director

Organic Initiative Limited Director and shareholder

Fantail Network Trust Trustee

Xero Limited (appointed 22 February 2017)* Director

Cris Nicolli (appointed 17 February 2017)

Nicolli Holdings PTY Limited Director and shareholder

Nicolli Family Superannuation Fund Trustee

Kadasig Aid & Development Treasurer

Share dealings of Directors

Directors disclosed, pursuant to section 148 of the Companies Act 1993, acquisitions and disposals of relevant

interests in the Company shares during the year ended 31 December 2016.

DATE OF ACQUISITION OR DISPOSAL

NAME OF DIRECTOR

NO & CLASS OF SHARES ACQUIRED

OR (DISPOSED) NATURE OF RELEVANT INTEREST

CONSIDERATION PAID OR

(RECEIVED)

23 March 2016 Murray Holdaway (5,378,471) Benefi cial as Trustee of Holdaway and Geary Trust ($28,505,896)

23 March 2016 Brian Cadzow (3,241,438) Benefi cial as Trustee of B&J Cadzow Family Trust ($17,179,621)

23 March 2016 Kirk Senior (922,421) Director of Kirk Senior Pty Ltd ($4,888,831)

23 March 2016 Susan Peterson 1,900 Legal $10,070

1 June 2016 Murray Holdaway (20,000) Benefi cial as Trustee of Holdaway and Geary Trust ($23,500)

1 June 2016 Brian Cadzow (10,000) Benefi cial as Trustee of B&J Cadzow Family Trust ($23,500)


Shareholdings of Directors at 31 December 2016

NAME OF DIRECTORDIRECTLY

HELD

HELD BY ASSOCIATED

PERSONS

Murray Holdaway 3,955,391

Brian Cadzow 3,231,437

Kirk Senior 922,420

James Ogden 130,000

Susan Peterson 44,453

Remuneration of Directors

Details of the total remuneration of, and the value of other

benefi ts received by, each Director of the Company during

the fi nancial year ended 31 December 2016 are as follows:

DIRECTOR FEES REMUNERATION

Murray Holdaway - 315,400

Brian Cadzow - 260,800

Kirk Senior 79,600 211,340

James Ogden 78,333 -

Susan Peterson 78,333 -

Employee remuneration

The following table shows the number of employees

(including employees holding offi ce as Directors of

subsidiaries) whose remuneration and benefi ts for

the year ended 31 December 2016 were within the

specifi ed bands above $100,000. The remuneration

fi gures shown in the table include all monetary

payments actually paid during the course of the year

ended 31 December 2016. The table does not include

amounts paid post 31 December 2016 that related to

the year ended 31 December 2016, such as short-term

incentive scheme bonuses. The table below includes

the remuneration of Murray Holdaway, Brian Cadzow

and Kirk Senior. No Director of a subsidiary receives

or retains any remuneration or other benefi ts from

the Company for acting as such.

EMPLOYEE REMUNERATIONSTAFF

NUMBERS

100,000 - 110,000 25

110,001 - 120,000 22

120,001 - 130,000 15

130,001 - 140,000 5

140,001 - 150,000 4

150,001 - 160,000 7

160,001 - 170,000 6

170,000 - 180,000 5

180,001 - 190,000 5

190,001 - 200,000 3

200,001 - 209,999 1

220,001 - 230,000 1

250,001 - 260,000 1

260,001 - 270,000 3

290,001 - 300,000 1

300,001 - 310,000 1

310,001 - 320,000 1

370,001 - 380,000 1

410,001 - 420,000 1

Total 108

Analysis of shareholding at 29 February 2017

RANGE NUMBER OF

HOLDERSNUMBER

OF SHARES

% OF SHARES ISSUED

1 – 1,000 305 181,592 0.22%

1,001 – 5,000 516 1,470,012 1.79%

5,001 – 10,000 212 1,588,011 1.94%

10,001 – 50,000 119 2,580,373 3.15%

50,001 – 100,000 15 1,091,771 1.33%

Greater than 100,000 39 75,028,534 91.57%

1206 81,940,293 100%


Twenty largest shareholders at 29 February 2017

INVESTOR NAMENUMBER

OF SHARESPERCENTAGE

HOLDING

1 New Zealand Central Securities Depository Limited 37,792,153 46.12%

2 J P Morgan Nominees Australia Limited 5,894,838 7.19%

3 Murray Lawrence Holdaway & Helen Rachel Geary & Stephen John Mcdonald 3,955,391 4.83%

4 Brian John Cadzow & Julie Ann Cadzow & Peter Allen Lewis 3,231,437 3.94%

5 Bruce Alexander Wighton & Marianne Bachler & Peter John Clark 2,707,989 3.30%

6 Gregory James Trounson & Donald Mackenzie Gibson & Kathryn Mary Lee Trounson 2,176,393 2.66%

7 Bnp Paribas Nominees Pty Ltd 2,029,210 2.48%

8 Citicorp Nominees Pty Limited 1,797,606 2.19%

9 Weying NZ (Bvi) Limited 1,638,805 2.00%

10 Bnp Paribas Noms Pty Ltd 1,329,800 1.62%

11 HSBC Custody Nominees (Australia) Limited 1,252,473 1.53%

12 Kirk Senior Pty Limited 922,420 1.13%

13 Investment Custodial Services Limited 772,621 0.94%

14 National Nominees Limited 712,604 0.87%

15 Waspp Corporation Ltd 701,350 0.86%

16 Forsyth Barr Custodians Ltd 699,741 0.85%

17 David Smith & Lara Smith 664,957 0.81%

18 Peter Joseph Beguely & Samuel James Beguely 573,491 0.70%

19 John Trevor Hanson & Bruce Trevor Hanson 548,266 0.67%

20 Mark E Pattie & Kelly M Pattie & Northern Trustee Services (No. 74) Limited 540,857 0.66%

20 Smith Family Holdings Ltd 540,857 0.66%

70,483,259 86.02%

Substantial Product Holders

According to notices given under the Financial

Markets Conduct Act 2013, the following persons

were Substantial Product Holders in the Company at

31 December 2016 in respect of the number of voting

securities set opposite their names:

NAME OF SUBSTANTIAL PRODUCT HOLDERNUMBER AND

CLASS OF SHARES

Devon Funds Management Limited 9,718,168

Fidelity International 7,999,163

Harbour Asset Management 6,379,620

Fisher Funds Management Ltd 4,858,573

Options

Nil


Performance Rights

The Company issued a total of 205,930 performance rights under the LTI scheme in the 2015 grant to a number of

employees and these will vest in two equal tranches. The Company issued 230,788 performance rights under the

LTI scheme in the 2016 grant to a number of employees and these will vest in two equal tranches. The table below

shows the grants and outstanding rights at 31 December 2016.

GRANT YEAR

TOTAL ORIGINAL

GRANT

VESTING DATES OF OUTSTANDING PERFORMANCE RIGHTSTOTAL

OUTSTANDINGAPR-17 APR-18 APR-19 APR-20

2015 205,930 102,965 102,965 205,930

2016 230,788 115,394 115,394 230,788

Total 436,718 102,965 218,359 115,394 – 436,718

The vesting of each tranche is subject to Vista Group achieving certain performance hurdles contained within the

LTI scheme. Upon vesting each performance right will entitle the holder to one ordinary share.

Auditor Remuneration

The Company confi rmed the re-appointment of PwC

as its auditor at its annual shareholder meeting on

24 May 2016. The amount payable to PWC by the

Company and its subsidiaries for audit and non-audit

services work for the fi nancial year ended 31 December

2016 is disclosed in section 9.1 to the fi nancial

statements. The Board considers that due to the

nature and quantum of the non-audit services work

the auditor’s independence is not compromised.

Waivers

The Company had no NZX waivers granted or

published by NZX within or relied upon in the

12 months ending 31 December 2016.

Subsidiary Company Directors

The following people held offi ce as Directors of

subsidiary companies at 31 December 2016:

• Kirk Senior: VESL, Vista Entertainment Solutions

(USA) Ltd, Virtual Concepts Ltd, Movio Ltd, Movio

Inc., Share Dimension B.V., Powster Ltd and Stardust

Solutions Ltd.

• Murray Lawrence Holdaway: VESL, MACCS

International B.V., Vista Entertainment Solutions

(UK) Ltd, Vista Entertainment Solutions (Shanghai),

Vista Entertainment Solutions (Canada) Ltd, Book

My Show Ltd, Book My Show (NZ) Ltd, Numero

Ltd, Numero (Aus) Pty Ltd, Flicks.co.nz Ltd, Vista

International Entertainment Solutions South Africa

PTY Ltd, Powster Ltd, Stardust Solutions Ltd.

• Brian John Cadzow: VESL, Virtual Concepts Ltd,

MACCS International B.V., Vista Entertainment

Solutions (UK) Ltd, Vista Entertainment Solutions

(USA) Ltd, Vista Entertainment Solutions (Canada)

Ltd, Book My Show Ltd, Book My Show (NZ) Ltd,

Numero Ltd, Numero (Aus) Pty Ltd, Movio Limited,

Movio Inc., Flicks.co.nz Ltd.

• William Stanley Palmer: Movio Inc.

• L.H. Huls: MACCS International B.V.

• Mathieu H.W. Van As: MACCS International B.V.

• Rajesh Chandrakant Balpande: Book My Show Ltd

& Book My Show (NZ) Ltd

• Simon John Burton: Numero Ltd & Numero (Aus)

Pty Ltd

• Sven Andresen: VPF Hub

• Kimbal Riley: Vista Entertainment Solutions

(Shanghai), Vista International Entertainment

Solutions South Africa PTY Ltd.

• Derek Geoffrey Forbes: Stardust Solutions Ltd

• Steven Thompson: Powster Ltd

• Nick Patsides: Powster Ltd

Annual Meeting

The Company’s Annual Meeting of shareholders will be

held in Auckland on 25 May 2017 at 3:00 pm. A notice

of Annual Meeting and Proxy Form will be circulated

to shareholders in April 2017.

Donations

The Vista Group made donations of $14,383 (2015 –

$18,333) during the 2016 fi nancial year.

Exercise of NZX Disciplinary Powers

NZX did not exercise any of its powers under NZX

Listing Rule 5.4.2 in relation to the Company during

the 2016 fi nancial year.

Credit Rating

The Company has no credit rating.


VISTA GROUP INTERNATIONAL LIMITEDLevel 3, 60 Khyber Pass Road

Newton, Auckland 1023

Phone: +64 9 984 4570Fax: +64 9 379 0685

Email: [email protected]: www.vistagroup.co.nz

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